II 

109TH CONGRESS 

2D SESSION S. 852 

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 19, 2005 

Mr. SPECTER (for himself, Mr. LEAHY, Mr. HATCH, Mrs. FEINSTEIN, Mr. 

GRASSLEY, Mr. DEWINE, Mr. BAUCUS, and Mr. VOINOVICH) introduced 

the following bill; which was read twice and referred to the Committee 

on the Judiciary 

JUNE 16, 2005 

Reported by Mr. SPECTER, with amendments 

[Omit the part struck through and insert the part printed in italic] 

FEBRUARY 8, 2006 

Considered 

FEBRUARY 9, 2006 

Committee amendments withdrawn 

FEBRUARY 14, 2006 

Recommitted to the Committee on the Judiciary pursuant to section 312(f) 

of the Congressional Budget Act 

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, 


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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

3 ‘‘Fairness in Asbestos Injury Resolution Act of 2005’’ or 

4 the ‘‘FAIR Act of 2005’’. 

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

6 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. 

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

TITLE II—ASBESTOS INJURY CLAIMS RESOLUTION FUND 

Subtitle A—Asbestos Defendants Funding Allocation 

Sec. 201. Definitions. 

Sec. 202. Authority and tiers. 

Sec. 203. Subtiers. 

Sec. 204. Assessment administration. 

Sec. 205. Stepdowns and funding holidays. 


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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. 

Subtitle C—Asbestos Injury Claims Resolution Fund 

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

Sec. 222. Management of the Fund. 

Sec. 223. Enforcement of payment obligations. 

Sec. 224. Interest on underpayment or nonpayment. 

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

TITLE III—JUDICIAL REVIEW 

Sec. 301. Judicial review of rules and regulations. 

Sec. 302. Judicial review of award decisions. 

Sec. 303. Judicial review of participants’ assessments. 

Sec. 304. Other judicial challenges. 

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

TITLE IV—MISCELLANEOUS PROVISIONS 

Sec. 401. False information. 

Sec. 402. Effect on bankruptcy laws. 

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

Sec. 404. Effect on insurance and reinsurance contracts. 

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

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

Sec. 407. Rules of construction. 

Sec. 408. Violation of environmental 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) Millions of Americans have been exposed to 

4 forms of asbestos that can have devastating health 

5 effects. 


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1 (2) Various injuries can be caused by exposure 

2 to some forms of asbestos, including pleural disease 

3 and some forms of cancer. 

4 (3) The injuries caused by asbestos can have la5 tency periods of up to 40 years, and even limited ex6 posure to some forms of asbestos may result in in7 jury in some cases. 

8 (4) Asbestos litigation has had a significant 

9 detrimental effect on the country’s economy, driving 

10 companies into bankruptcy, diverting resources from 

11 those who are truly sick, and endangering jobs and 

12 pensions. 

13 (5) The scope of the asbestos litigation crisis 

14 cuts across every State and virtually every industry. 

15 (6) The United States Supreme Court has rec16 ognized that Congress must act to create a more ra17 tional asbestos claims system. In 1991, a Judicial 

18 Conference Ad Hoc Committee on Asbestos Litiga19 tion, appointed by Chief Justice William Rehnquist, 

20 found that the ‘‘ultimate solution should be legisla21 tion recognizing the national proportions of the 

22 problem . . . and creating a national asbestos dis23 pute resolution scheme . . .’’. The Court found in 

24 1997 in Amchem Products Inc. v. Windsor, 521 

25 U.S. 591, 595 (1997), that ‘‘[t]he argument is senVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 sibly made that a nationwide administrative claims 

2 processing regime would provide the most secure, 

3 fair, and efficient means of compensating victims of 

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

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

6 that the ‘‘elephantine mass of asbestos cases . . . 

7 defies customary judicial administration and calls 

8 for national legislation.’’ That finding was again rec9 ognized in 2003 by the Court in Norfolk & Western 

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

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

12 health and welfare of the people of the United 

13 States, on interstate and foreign commerce, and on 

14 the bankruptcy system, compels Congress to exercise 

15 its power to regulate interstate commerce and create 

16 this legislative solution in the form of a national as17 bestos injury claims resolution program to supersede 

18 all existing methods to compensate those injured by 

19 asbestos, except as specified in this Act. 

20 (8) This crisis has also imposed a deleterious 

21 burden upon the United States bankruptcy courts, 

22 which have assumed a heavy burden of admin23 istering complicated and protracted bankruptcies 

24 with limited personnel. 


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1 (9) This crisis has devastated many commu2 nities across the country, but hardest hit has been 

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

4 most deadly forms of asbestos, was contained in the 

5 vermiculite ore mined from the area and despite on6 going cleanup by the Environmental Protection 

7 Agency, many still suffer from the deadly dust. 

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

9 (1) create a privately funded, publicly adminis10 tered fund to provide the necessary resources for a 

11 fair and efficient system to resolve asbestos injury 

12 claims that will provide compensation for legitimate 

13 present and future claimants of asbestos exposure as 

14 provided in this Act; 

15 (2) provide compensation to those present and 

16 future victims based on the severity of their injuries, 

17 while establishing a system flexible enough to accom18 modate individuals whose conditions worsens; 

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

20 burden of the asbestos litigation; and 

21 (4) increase economic stability by resolving the 

22 asbestos litigation crisis that has bankrupted compa23 nies with asbestos liability, diverted resources from 

24 the truly sick, and endangered jobs and pensions. 


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1 SEC. 3. DEFINITIONS. 

2 In this Act, the following definitions shall apply: 

3 (1) ADMINISTRATOR.—The term ‘‘Adminis4 trator’’ means the Administrator of the Office of As5 bestos Disease Compensation appointed under sec6 tion 101(b). 

7 (2) ASBESTOS.—The term ‘‘asbestos’’ in8 cludes— 

9 (A) chrysotile; 

10 (B) amosite; 

11 (C) crocidolite; 

12 (D) tremolite asbestos; 

13 (E) winchite asbestos; 

14 (F) richterite asbestos; 

15 (G) anthophyllite asbestos; 

16 (H) actinolite asbestos; 

17 (I) amphibole asbestos; 

18 (J) any of the minerals listed under sub19 paragraphs (A) through (I) that has been 

20 chemically treated or altered, and any 

21 asbestiform variety, type, or component thereof; 

22 and 

23 (K) asbestos-containing material, such as 

24 asbestos-containing products, automotive or in25 dustrial parts or components, equipment, im26 provements to real property, and any other maVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 terial that contains asbestos in any physical or 

2 chemical form. 

3 (3) ASBESTOS CLAIM.— 

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

5 claim’’ means any claim, premised on any the6 ory, allegation, or cause of action for damages 

7 or other relief presented in a civil action or 

8 bankruptcy proceeding, directly, indirectly, or 

9 derivatively arising out of, based on, or related 

10 to, in whole or part, the health effects of expo11 sure to asbestos, including loss of consortium, 

12 wrongful death, and any derivative claim made 

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

14 representative, spouse, parent, child, or other 

15 relative of any exposed person. 

16 (B) EXCLUSION.—The term does not in17 clude— 

18 (i) claims alleging damage or injury to 

19 tangible property; 

20 (ii) claims for benefits under a work21 ers’ compensation law or veterans’ benefits 

22 program; 

23 (iii) claims arising under any govern24 mental or private health, welfare, disVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 ability, death or compensation policy, pro2 gram or plan; 

3 (iv) claims arising under any employ4 ment contract or collective bargaining 

5 agreement; or 

6 (v) claims arising out of medical mal7 practice. 

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

9 claimant’’ means an individual who files a claim 

10 under section 113. 

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

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

13 court, whether cognizable as cases at law or in eq14 uity or in admiralty, but does not include an action 

15 relating to any workers’ compensation law, or a pro16 ceeding for benefits under any veterans’ benefits 

17 program. 

18 (6) COLLATERAL SOURCE COMPENSATION.— 

19 The term ‘‘collateral source compensation’’ means 

20 the compensation that the claimant received, or is 

21 entitled to receive, from a defendant or an insurer 

22 of that defendant, or compensation trust as a result 

23 of a final judgment or settlement for an asbestos-re24 lated injury that is the subject of a claim filed under 

25 section 113. 


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1 (7) ELIGIBLE DISEASE OR CONDITION.—The 

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

3 that an illness meets the medical criteria require4 ments established under subtitle C of title I. 

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

6 ‘‘Act of April 22, 1908 (45 U.S.C. 51 et seq.), com7 monly known as the Employer’s Liability Act’’ shall, 

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

9 5, 1920 (46 U.S.C. App. 688), commonly known as 

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

11 a common carrier by railroad’’ shall include oper12 ations as an employer of seamen. 

13 (9) FUND.—The term ‘‘Fund’’ means the As14 bestos Injury Claims Resolution Fund established 

15 under section 221. 

16 (10) INSURANCE RECEIVERSHIP PRO17 CEEDING.—The term ‘‘insurance receivership pro18 ceeding’’ means any State proceeding with respect to 

19 a financially impaired or insolvent insurer or rein20 surer including the liquidation, rehabilitation, con21 servation, supervision, or ancillary receivership of an 

22 insurer under State law. 

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

24 judicial or administrative decisions, rules, regulaVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 tions, or any other principle or action having the ef2 fect of law. 

3 (12) PARTICIPANT.— 

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

5 means any person subject to the funding re6 quirements of title II, including— 

7 (i) any defendant participant subject 

8 to liability for payments under subtitle A 

9 of that title; 

10 (ii) any insurer participant subject to 

11 a payment under subtitle B of that title; 

12 and 

13 (iii) any successor in interest of a par14 ticipant. 

15 (B) EXCEPTION.— 

16 (i) IN GENERAL.—A defendant partic17 ipant shall not include any person pro18 tected from any asbestos claim by reason 

19 of an injunction entered in connection with 

20 a plan of reorganization under chapter 11 

21 of title 11, United States Code, that has 

22 been confirmed by a duly entered order or 

23 judgment of a court that is no longer sub24 ject to any appeal or judicial review, and 

25 the substantial consummation, as such 


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

2 11, United States Code, of such plan of re3 organization has occurred. 

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

5 not apply to a person who may be liable 

6 under subtitle A of title II based on prior 

7 asbestos expenditures related to asbestos 

8 claims that are not covered by an injunc9 tion described under clause (i). 

10 (13) PERSON.—The term ‘‘person’’— 

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

12 stock company, partnership, association, insur13 ance company, reinsurance company, or cor14 poration; and 

15 (B) does not include the United States, 

16 any State or local government, or subdivision 

17 thereof, including school districts and any gen18 eral or special function governmental unit es19 tablished under State law. 

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

21 State of the United States and also includes the Dis22 trict of Columbia, Commonwealth of Puerto Rico, 

23 the Northern Mariana Islands, the Virgin Islands, 

24 Guam, American Samoa, and any other territory or 


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1 possession of the United States or any political sub2 division of any of the entities under this paragraph. 

3 (15) SUBSTANTIALLY CONTINUES.—The term 

4 ‘‘substantially continues’’ means that the business 

5 operations have not been significantly modified by 

6 the change in ownership. 

7 (16) SUCCESSOR IN INTEREST.—The term 

8 ‘‘successor in interest’’ means any person that ac9 quires assets, and substantially continues the busi10 ness operations, of a participant. The factors to be 

11 considered in determining whether a person is a suc12 cessor in interest include— 

13 (A) retention of the same facilities or loca14 tion; 

15 (B) retention of the same employees; 

16 (C) maintaining the same job under the 

17 same working conditions; 

18 (D) retention of the same supervisory per19 sonnel; 

20 (E) continuity of assets; 

21 (F) production of the same product or 

22 offer of the same service; 

23 (G) retention of the same name; 

24 (H) maintenance of the same customer 

25 base; 


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1 (I) identity of stocks, stockholders, and di2 rectors between the asset seller and the pur3 chaser; or 

4 (J) whether the successor holds itself out 

5 as continuation of previous enterprise, but ex6 pressly does not include whether the person ac7 tually knew of the liability of the participant 

8 under this Act. 

9 (17) VETERANS’ BENEFITS PROGRAM.—The 

10 term ‘‘veterans’ benefits program’’ means any pro11 gram for benefits in connection with military service 

12 administered by the Veterans’ Administration under 

13 title 38, United States Code. 

14 (18) WORKERS’ COMPENSATION LAW.—The 

15 term ‘‘workers’ compensation law’’— 

16 (A) means a law respecting a program ad17 ministered by a State or the United States to 

18 provide benefits, funded by a responsible em19 ployer or its insurance carrier, for occupational 

20 diseases or injuries or for disability or death 

21 caused by occupational diseases or injuries; 

22 (B) includes the Longshore and Harbor 

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

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

25 Code; and 


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

2 1908 (45 U.S.C. 51 et seq.), commonly known 

3 as the Employers’ Liability Act, or damages re4 covered by any employee in a liability action 

5 against an employer. 

6 TITLE I—ASBESTOS CLAIMS 

7 RESOLUTION 

8 Subtitle A—Office of Asbestos 

9 Disease Compensation 

10 SEC. 101. ESTABLISHMENT OF OFFICE OF ASBESTOS DIS11 EASE COMPENSATION. 

12 (a) IN GENERAL.— 

13 (1) ESTABLISHMENT.—There is established 

14 within the Department of Labor the Office of Asbes15 tos Disease Compensation (hereinafter referred to in 

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

17 an Administrator. 

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

19 provide timely, fair compensation, in the amounts 

20 and under the terms specified in this Act, on a no21 fault basis and in a non-adversarial manner, to indi22 viduals whose health has been adversely affected by 

23 exposure to asbestos. 

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

25 the Asbestos Injury Claims Resolution Fund to the 


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1 Administrator such sums as are necessary for the 

2 administrative expenses of the Office, including the 

3 sums necessary for conducting the studies provided 

4 for in section 121(e). 

5 (b) APPOINTMENT OF ADMINISTRATOR.— 

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

7 Office of Asbestos Disease Compensation shall be 

8 appointed by the President, by and with the advice 

9 and consent of the Senate. The Administrator shall 

10 serve for a term of 5 years. 

11 (2) REPORTING.—The Administrator shall re12 port directly to the Assistant Secretary of Labor for 

13 the Employment Standards Administration. 

14 (c) DUTIES OF ADMINISTRATOR.— 

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

16 responsible for— 

17 (A) processing claims for compensation for 

18 asbestos-related injuries and paying compensa19 tion to eligible claimants under the criteria and 

20 procedures established under title I; 

21 (B) determining, levying, and collecting as22 sessments on participants under title II; 

23 (C) appointing or contracting for the serv24 ices of such personnel, making such expendi25 tures, and taking any other actions as may be 


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1 necessary and appropriate to carry out the re2 sponsibilities of the Office, including entering 

3 into cooperative agreements with other Federal 

4 agencies or State agencies and entering into 

5 contracts with nongovernmental entities; 

6 (D) conducting such audits and additional 

7 oversight as necessary to assure the integrity of 

8 the program; 

9 (E) managing the Asbestos Injury Claims 

10 Resolution Fund established under section 221, 

11 including— 

12 (i) administering, in a fiduciary capac13 ity, the assets of the Fund for the exclu14 sive purpose of providing benefits to asbes15 tos claimants and their beneficiaries; 

16 (ii) defraying the reasonable expenses 

17 of administering the Fund; 

18 (iii) investing the assets of the Fund 

19 in accordance with section 222(b); 

20 (iv) retaining advisers, managers, and 

21 custodians who possess the necessary fa22 cilities and expertise to provide for the 

23 skilled and prudent management of the 

24 Fund, to assist in the development, imple25 mentation and maintenance of the Fund’s 


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1 investment policies and investment activi2 ties, and to provide for the safekeeping and 

3 delivery of the Fund’s assets; and 

4 (v) borrowing amounts authorized by 

5 section 221(b) on appropriate terms and 

6 conditions, including pledging the assets of 

7 or payments to the Fund as collateral; 

8 (F) promulgating such rules, regulations, 

9 and procedures as may be necessary and appro10 priate to implement the provisions of this Act; 

11 (G) making such expenditures as may be 

12 necessary and appropriate in the administration 

13 of this Act; 

14 (H) excluding evidence and disqualifying or 

15 debarring any attorney, physician, provider of 

16 medical or diagnostic services, including labora17 tories and others who provide evidence in sup18 port of a claimant’s application for compensa19 tion where the Administrator determines that 

20 materially false, fraudulent, or fictitious state21 ments or practices have been submitted or en22 gaged in by such individuals or entities; and 

23 (I) having all other powers incidental, nec24 essary, or appropriate to carrying out the func25 tions of the Office. 


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1 (2) CERTAIN ENFORCEMENTS.—For each in2 fraction relating to paragraph (1)(H), the Adminis3 trator also may impose a civil penalty not to exceed 

4 $10,000 on any person or entity found to have sub5 mitted or engaged in a materially false, fraudulent, 

6 or fictitious statement or practice under this Act. 

7 The Administrator shall prescribe appropriate regu8 lations to implement paragraph (1)(H). 

9 (3) SELECTION OF DEPUTY ADMINISTRA10 TORS.—The Administrator shall select a Deputy Ad11 ministrator for Claims Administration to carry out 

12 the Administrator’s responsibilities under this title 

13 and a Deputy Administrator for Fund Management 

14 to carry out the Administrator’s responsibilities 

15 under title II of this Act. The Deputy Administra16 tors shall report directly to the Administrator and 

17 shall be in the Senior Executive Service. 

18 (d) EXPEDITIOUS DETERMINATIONS.—The Adminis19 trator shall prescribe rules to expedite claims for asbestos 

20 claimants with exigent circumstances in order to expedite 

21 the payment of such claims as soon as possible after start22 up of the Fund. The Administrator shall contract out the 

23 processing of such claims. 

24 (e) AUDIT AND PERSONNEL REVIEW PROCE25 DURES.—The Administrator shall establish audit and perVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 sonnel review procedures for evaluating the accuracy of 

2 eligibility recommendations of agency and contract per3 sonnel. 

4 (f) APPLICATION OF FOIA.— 

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

6 United States Code (commonly referred to as the 

7 Freedom of Information Act) shall apply to the Of8 fice of Asbestos Disease Compensation and the As9 bestos Insurers Commission. 

10 (2) CONFIDENTIALITY.—Any person may des11 ignate any record submitted under this section as a 

12 confidential commercial or financial record for pur13 poses of section 552 of title 5, United States Code. 

14 The Administrator and the Chairman of the Asbes15 tos Insurers Commission shall adopt procedures for 

16 designating such records as confidential. Information 

17 on reserves and asbestos-related liabilities submitted 

18 by any participant for the purpose of the allocation 

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

20 be deemed to be confidential financial records. 

21 SEC. 102. ADVISORY COMMITTEE ON ASBESTOS DISEASE 

22 COMPENSATION. 

23 (a) ESTABLISHMENT.— 

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

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

4 (2) COMPOSITION AND APPOINTMENT.—The 

5 Advisory Committee shall be composed of 24 mem6 bers, appointed as follows— 

7 (A) The Majority and Minority Leaders of 

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

9 Minority Leader of the House shall each ap10 point 4 members. Of the 4— 

11 (i) 2 shall be selected to represent the 

12 interests of claimants, at least 1 of whom 

13 shall be selected from among individuals 

14 recommended by recognized national labor 

15 federations; and 

16 (ii) 2 shall be selected to represent the 

17 interests of participants, 1 of whom shall 

18 be selected to represent the interests of the 

19 insurer participants and 1 of whom shall 

20 be selected to represent the interests of the 

21 defendant participants. 

22 (B) The Administrator shall appoint 8 

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


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

3 other relevant fields. 

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

8 asbestos-related diseases and conditions, assessing 

9 asbestos exposure and health risks, filing asbestos 

10 claims, administering a compensation or insurance 

11 program, or as actuaries, auditors, or investment 

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

14 the 5 years before their appointments, earned more 

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

17 expert witnesses. 

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

19 the Administrator on— 

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

22 (2) claimant assistance programs; 

23 (3) audit procedures and programs to ensure 

24 the quality and integrity of the compensation pro25 gram; 


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

5 (5) recommended analyses or research that 

6 should be conducted to evaluate past claims and to 

7 project future claims under the program; 

8 (6) the annual report required to be submitted 

9 to Congress under section 405; and 

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

13 (c) OPERATION OF THE COMMITTEE.— 

14 (1) Each member of the Advisory Committee 

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

16 of the members first appointed— 

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

18 year; 

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

20 years; and 

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

22 years, as determined by the Administrator at 

23 the time of appointment. 


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

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

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

8 (4) The Advisory Committee shall meet at the 

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

11 per year during the first 5 years of the asbestos 

12 compensation program, and at least 2 times per year 

13 thereafter. 

14 (5) The Administrator shall provide to the 

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

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

20 or agency such information as may be necessary and 

21 appropriate to enable the Advisory Committee to 

22 carry out its duties under this section. Upon request 

23 of the Administrator, the head of such department 

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


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

3 is reasonably necessary to enable it to perform its 

4 functions. 

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

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

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

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

13 for individuals in the Government serving without pay. 

14 SEC. 103. MEDICAL ADVISORY COMMITTEE. 

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

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

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

19 Medical Advisory Committee shall be individuals who, for 

20 each of the 5 years before their appointments, earned 

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

23 witnesses. 


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1 SEC. 104. CLAIMANT ASSISTANCE. 

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

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

5 to— 

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

8 eligible claimants under this Act, and the procedures 

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

11 (2) provide assistance to potential claimants in 

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

14 support a claim; 

15 (3) respond to inquiries from claimants and po16 tential claimants; 

17 (4) provide training with respect to the applica18 ble procedures for the preparation and filing of 

19 claims to persons who provide assistance or rep20 resentation to claimants; and 

21 (5) provide for the establishment of a website 

22 where claimants may access all relevant forms and 

23 information. 

24 (b) RESOURCE CENTERS.—The claimant assistance 

25 program shall provide for the establishment of resource 

26 centers in areas where there are determined to be large 


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1 concentrations of potential claimants. These centers shall 

2 be located, to the extent feasible, in facilities of the De3 partment of Labor or other Federal agencies. 

4 (c) CONTRACTS.—The claimant assistance program 

5 may be carried out in part through contracts with labor 

6 organizations, community-based organizations, and other 

7 entities which represent or provide services to potential 

8 claimants, except that such organizations may not have 

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

10 Office. 

11 (d) LEGAL ASSISTANCE.— 

12 (1) IN GENERAL.—As part of the program es13 tablished under subsection (a), the Administrator 

14 shall establish a legal assistance program to provide 

15 assistance to asbestos claimants concerning legal 

16 representation issues. 

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

18 of the program, the Administrator shall maintain a 

19 roster of qualified attorneys who have agreed to pro20 vide pro bono services to asbestos claimants under 

21 rules established by the Administrator. The claim22 ants shall not be required to use the attorneys listed 

23 on such roster. 

24 (3) NOTICE.— 


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1 (A) NOTICE BY ADMINISTRATOR.—The 

2 Administrator shall provide asbestos claimants 

3 with notice of, and information relating to— 

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

6 (ii) any limitations on attorneys fees 

7 for claims filed under this title. 

8 (B) NOTICE BY ATTORNEYS.—Before a 

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

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

13 (e) ATTORNEY’S FEES.— 

14 (1) IN GENERAL.—Notwithstanding any con15 tract, the representative of an individual may not re16 ceive, for services rendered in connection with the 

17 claim of an individual under the Fund, more than 5 

18 percent of a final award made (whether by the Ad19 ministrator initially or as a result of administrative 

20 review) under the Fund on such claim. 

21 (2) PENALTY.—Any representative of an asbes22 tos claimant who violates this subsection shall be 

23 fined not more than the greater of— 

24 (A) $5,000; or 


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1 (B) twice the amount received by the rep2 resentative for services rendered in connection 

3 with each such violation. 

4 SEC. 105. PHYSICIANS PANELS. 

5 (a) APPOINTMENT.—The Administrator shall, in ac6 cordance with section 3109 of title 5, United States Code, 

7 appoint physicians with experience and competency in di8 agnosing asbestos-related diseases to be available to serve 

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

10 (b) FORMATION OF PANELS.— 

11 (1) IN GENERAL.—The Administrator shall pe12 riodically determine— 

13 (A) the number of Physicians Panels nec14 essary for the efficient conduct of the medical 

15 review process under section 121; 

16 (B) the number of Physicians Panels nec17 essary for the efficient conduct of the excep18 tional medical claims process under section 121; 

19 and 

20 (C) the particular expertise necessary for 

21 each panel. 

22 (2) EXPERTISE.—Each Physicians Panel shall 

23 be composed of members having the particular ex24 pertise determined necessary by the Administrator, 


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1 randomly selected from among the physicians ap2 pointed under subsection (a) having such expertise. 

3 (3) PANEL MEMBERS.— 

4 (A) IN GENERAL.—Except as provided 

5 under subparagraph (B), each Physicians Panel 

6 shall consist of 3 physicians, 2 of whom shall be 

7 designated to participate in each case submitted 

8 to the Physicians Panel, and the third of whom 

9 shall be consulted in the event of disagreement. 

10 (B) WAIVER.—The Administrator may 

11 waive the provisions of subparagraph (A) and 

12 may provide for panels of less than 3 physi13 cians, if the Administrator determines that— 

14 (i) there is a shortage of qualified 

15 physicians available for service on panels; 

16 and 

17 (ii) such shortage will result in admin18 istrative delay in the claims process. 

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

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

21 (1) a physician licensed in any State; 

22 (2) board-certified in pulmonary medicine, occu23 pational medicine, internal medicine, oncology, or 

24 pathology; and 


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

2 before and during his or her appointment to a Phy3 sicians Panel, has earned not more than 15 percent 

4 of his or her income as an employee of a partici5 pating defendant or insurer or a law firm rep6 resenting any party in asbestos litigation or as a 

7 consultant or expert witness in matters related to 

8 asbestos litigation. 

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

10 (1) make such medical determinations as are 

11 required to be made by Physicians Panels under sec12 tion 121; and 

13 (2) perform such other functions as required 

14 under this Act. 

15 (e) COMPENSATION.—Notwithstanding any limitation 

16 otherwise established under section 3109 of title 5, United 

17 States Code, the Administrator shall be authorized to pay 

18 members of a Physician Panel such compensation as is 

19 reasonably necessary to obtain their services. 

20 (f) FEDERAL ADVISORY COMMITTEE ACT.—A Physi21 cians Panel established under this section shall not be sub22 ject to the Federal Advisory Committee Act (5 U.S.C. 

23 App. 2). 


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1 SEC. 106. PROGRAM STARTUP. 

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

3 after the date of enactment of this Act, the Administrator 

4 shall promulgate interim regulations and procedures for 

5 the processing of claims under title I and the operation 

6 of the Fund under title II, including procedures for the 

7 expediting of exigent health claims. 

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

9 and the Assistant Secretary of Labor for the Employment 

10 Standards Administration may make available to the Ad11 ministrator on a temporary basis such personnel and other 

12 resources as may be necessary to facilitate the expeditious 

13 startup of the program. The Administrator may in addi14 tion contract with individuals or entities having relevant 

15 experience to assist in the expeditious startup of the pro16 gram. Such relevant experience shall include, but not be 

17 limited to, experience with the review of workers’ com18 pensation, occupational disease, or similar claims and with 

19 financial matters relevant to the operation of the program. 

20 (c) EXIGENT HEALTH CLAIMS.— 

21 (1) IN GENERAL.—The Administrator shall de22 velop procedures to provide for an expedited process 

23 to categorize, evaluate, and pay exigent health 

24 claims. Such procedures shall include, pending pro25 mulgation of final regulations, adoption of interim 


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1 regulations as needed for processing of exigent 

2 health claims. 

3 (2) ELIGIBLE EXIGENT HEALTH CLAIMS.—A 

4 claim shall qualify for treatment as an exigent 

5 health claim if the claimant is living and the claim6 ant provides— 

7 (A) a diagnosis of mesothelioma meeting 

8 the requirements of section 121(d)(10); or 

9 (B) a declaration or affidavit, from a phy10 sician who has examined the claimant within 

11 120 days before the date of such declaration or 

12 affidavit, that the physician has diagnosed the 

13 claimant as being terminally ill from an asbes14 tos-related illness and having a life expectancy 

15 of less than 1 year. 

16 (3) ADDITIONAL EXIGENT HEALTH CLAIMS.— 

17 The Administrator may, in final regulations promul18 gated under section 101(c), designate additional cat19 egories of claims that qualify as exigent health 

20 claims under this subsection. 

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

22 payment of exigent health claims, the Administrator 

23 shall contract with a claims facility, which applying 

24 the medical criteria of section 121, may enter into 

25 settlements with claimants. In the absence of an 


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1 offer of judgment as provided under section 

2 106(f)(2), the claimant may submit a claim to that 

3 claims facility. The claims facility shall receive the 

4 claimant’s submissions and evaluate the claim in ac5 cordance with subtitles B and C. The claims facility 

6 shall then submit the file to the Administrator for 

7 payment in accordance with subtitle D. This sub8 section shall not apply to exceptional medical claims 

9 under section 121(f). A claimant may appeal any de10 cision at a claims facility with the Administrator in 

11 accordance with section 114. 

12 (5) AUTHORIZATION FOR CONTRACTS WITH

13 CLAIMS FACILITIES.—The Administrator may enter 

14 into contracts with claims facilities for the proc15 essing of claims (except for exceptional medical 

16 claims) in accordance with this title. 

17 (d) EXTREME FINANCIAL HARDSHIP CLAIMS.—The 

18 Administrator shall, in final regulations promulgated 

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

20 handled on an expedited basis as a result of extreme finan21 cial hardship. 

22 (e) INTERIM ADMINISTRATOR.—Until an Adminis23 trator is appointed and confirmed under section 101(b), 

24 the responsibilities of the Administrator under this Act 

25 shall be performed by the Assistant Secretary of Labor 


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1 for the Employment Standards Administration, who shall 

2 have all the authority conferred by this Act on the Admin3 istrator and who shall be deemed to be the Administrator 

4 for purposes of this Act. Before final regulations being 

5 promulgated relating to claims processing, the Interim Ad6 ministrator may prioritize claims processing, without re7 gard to the time requirements prescribed in subtitle B of 

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

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

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

11 (1) STAY OF CLAIMS.—Notwithstanding any 

12 other provision of this Act, any asbestos claim pend13 ing as of the date of enactment of this Act, other 

14 than a claim to which section 403(d)(2)(A) applies, 

15 shall be subject to a stay. 

16 (2) EXIGENT HEALTH CLAIMS.— 

17 (A) PROCEDURES FOR SETTLEMENT OF

18 EXIGENT HEALTH CLAIMS.— 

19 (i) IN GENERAL.—Any person that 

20 has filed a timely exigent health claim 

21 seeking a judgment or order for monetary 

22 damages in any Federal or State court be23 fore or after the date of enactment of this 

24 Act, may immediately seek an offer of 


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1 judgment of such claim in accordance with 

2 this subparagraph. 

3 (ii) FILING.— 

4 (I) IN GENERAL.—The claimant 

5 shall file with the Administrator and 

6 serve upon all defendants in the pend7 ing court action an election to pursue 

8 an offer of judgment— 

9 (aa) within 60 days after the 

10 date of enactment of this Act, if 

11 the claim was filed in a Federal 

12 or State court before such date 

13 of enactment; and 

14 (bb) within 60 days after 

15 the date of the filing of the 

16 claim, if the claim is filed in a 

17 Federal or State court on or 

18 after the date of enactment of 

19 this Act. 

20 (II) STAY.—If the claimant fails 

21 to file and serve a timely election 

22 under this clause, the stay under sub23 paragraph (B) shall remain in effect. 

24 (iii) INFORMATION.—A claimant who 

25 has filed a timely election under clause (ii) 


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1 shall within 60 days after filing provide to 

2 each defendant and to the Administrator— 

3 (I) the amount received or due to 

4 be received as a result of all settle5 ments that would qualify as a collat6 eral source under section 134, to7 gether with copies of all settlement 

8 agreements and related documents 

9 sufficient to show the accuracy of that 

10 amount; 

11 (II) all information that the 

12 claimant would be required to provide 

13 to the Administrator in support of a 

14 claim under sections 115 and 121; 

15 and 

16 (III) a certification by the claim17 ant that the information provided is 

18 true and complete. 

19 (iv) CERTIFICATION.—The certifi20 cation provided under clause (iii) shall be 

21 subject to the same penalties for false or 

22 misleading statements that would be appli23 cable with regard to information provided 

24 to the Administrator in support of a claim. 


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1 (v) OFFER OF JUDGMENT.—Within 

2 30 days after service of a complete set of 

3 the information described in clause (iii), 

4 any defendant may file and serve on all 

5 parties a good faith offer of judgment in 

6 an aggregate amount not to exceed the 

7 total amount to which the claimant may be 

8 entitled under section 131 after adjust9 ment for collateral sources under section 

10 134. If the aggregate amount offered by all 

11 defendants exceeds the limitation in this 

12 clause, all offers shall be deemed reduced 

13 pro-rata until the aggregate amount equals 

14 the amount provided under section 131. 

15 (vi) ACCEPTANCE OR REJECTION.— 

16 Within 20 days after the service of the last 

17 offer of judgment, the claimant shall either 

18 accept or reject such offers. If the amount 

19 of the offer made by any defendant individ20 ually, or by any defendants jointly, equals 

21 or exceeds 100 percent of what the claim22 ant would receive under the Fund, the 

23 claimant shall accept such offer and re24 lease any outstanding asbestos claims. 


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1 (vii) LUMP SUM PAYMENT.—Any ac2 cepted offer of judgment shall be payable 

3 within 30 days and in 1 lump sum in order 

4 to settle the pending claim. 

5 (viii) RECOVERY OF COSTS.—Any de6 fendant whose offer of judgment is accept7 ed and has settled an asbestos claim under 

8 clauses (vi) and (vii) may recover the cost 

9 of such settlement by deducting from its 

10 next and subsequent contributions to the 

11 Fund for the full amount of the payment 

12 made by such defendant to the exigent 

13 health claimant, unless the Administrator 

14 finds, on the basis of clear and convincing 

15 evidence, that— 

16 (I) the claimant did not meet the 

17 requirements of an exigent health 

18 claim; and 

19 (II) the defendant’s offer was col20 lusive or otherwise not in good faith. 

21 (ix) INDEMNIFICATION.—In any case 

22 in which the Administrator refuses to 

23 grant full indemnification under clause 

24 (viii), the Administrator may provide such 

25 partial indemnification as may be fair and 


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1 just in the circumstances. If Administrator 

2 denies indemnification, the defendant may 

3 seek contribution from other non-settling 

4 defendants, as well as reimbursement 

5 under the defendant’s applicable insurance 

6 policies. If the Administrator refuses to 

7 grant full or partial indemnification based 

8 on collusive action, the defendant may pur9 sue any available remedy against the 

10 claimant. 

11 (x) REFUSAL TO MAKE OFFER.—If a 

12 defendant refuses to make an offer of 

13 judgment, the claimant may continue to 

14 seek a judgment or order for monetary 

15 damages from the court where the case is 

16 currently pending in an amount not to ex17 ceed 150 percent of what the claimant 

18 would receive if the claimant had filed a 

19 claim with the Fund. Such a judgment or 

20 order may also provide an award for claim21 ant’s attorneys’ fees and the costs of litiga22 tion. 

23 (xi) REJECTION OF OFFER.—If the 

24 claimant rejects the offer as less than what 

25 the claimant would qualify to receive under 


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1 section 131, the claimant may immediately 

2 pursue the claim in court where the claim3 ant shall demonstrate, in addition to all 

4 other essential elements of the claimant’s 

5 claim against any defendant, that the 

6 claimant meets the requirements of section 

7 121. 

8 (B) PURSUAL OF EXIGENT HEALTH

9 CLAIMS.— 

10 (i) STAY.—If a claimant does not 

11 elect to seek an offer of judgment under 

12 subparagraph (A), the pending claim is 

13 stayed for 9 months after the date of en14 actment of this Act. 

15 (ii) DEFENDANT OFFER.—If a claim16 ant does not elect to seek an offer of judg17 ment under subparagraph (A), the defend18 ant may elect to make an offer according 

19 to the provisions of this paragraph, except 

20 that a claimant shall not be required to ac21 cept that offer. The claimant shall accept 

22 or reject the offer within 20 days. 

23 (iii) CLAIMS FACILITY.—If a claimant 

24 does not elect to seek an offer of judgment 

25 under subparagraph (A), the claimant may 


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1 seek an award from the Fund through the 

2 claims facility under section 106 (c)(4). 

3 (iv) CONTINUANCE OF CLAIMS.—If, 

4 after 9 months after the date of enactment 

5 of this Act, the Administrator cannot cer6 tify to Congress that the Fund is oper7 ational and paying exigent health claims at 

8 a reasonable rate, each person that has 

9 filed an exigent health claim before such 

10 date of enactment and stayed under this 

11 paragraph may continue their exigent 

12 health claims in the court where the case 

13 was pending on the date of enactment of 

14 this Act. For exigent claims filed after the 

15 date of enactment of this Act, by claimants 

16 who do not elect to seek an offer of judg17 ment under subparagraph (A), the pending 

18 claim is stayed for 9 months after the date 

19 the claim is filed, unless during that period 

20 the Administrator can certify to Congress 

21 that the Fund is operational and paying 

22 valid claims at a reasonable rate. 

23 (C) CREDIT OF CLAIM AND EFFECT OF

24 OPERATIONAL FUND.—If an asbestos claim is 

25 pursued in Federal or State court in accordance 


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1 with this paragraph, any recovery by the claim2 ant shall be a collateral source compensation 

3 for purposes of section 134. 

4 (3) PURSUAL OF ASBESTOS CLAIMS IN FED5 ERAL OR STATE COURT.— 

6 (A) IN GENERAL.—Notwithstanding any 

7 other provision of this Act, if, not later than 24 

8 months after the date of enactment of this Act, 

9 the Administrator cannot certify to Congress 

10 that the Fund is operational and paying all 

11 valid claims at a reasonable rate, any person 

12 with a non-exigent asbestos claim stayed under 

13 this paragraph, except for any person whose 

14 claim does not exceed a Level I claim, may pur15 sue that claim in the Federal district court or 

16 State court located within— 

17 (i) the State of residence of the claim18 ant; or 

19 (ii) the State in which the asbestos ex20 posure arose. 

21 (B) DEFENDANTS NOT FOUND.—If any 

22 defendant cannot be found in the State de23 scribed in clause (i) or (ii) of subparagraph (A), 

24 the claim may be pursued in the Federal disVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00043 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 trict court or State court located within any 

2 State in which the defendant may be found. 

3 (C) DETERMINATION OF MOST APPRO4 PRIATE FORUM.—If a person alleges that the 

5 asbestos exposure occurred in more than 1 

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

7 determine which State and county (or Federal 

8 district) is the most appropriate forum for the 

9 claim. If the court determines that another 

10 forum would be the most appropriate forum for 

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

12 otherwise applicable statute of limitations shall 

13 be tolled beginning on the date the claim was 

14 filed and ending on the date the claim is dis15 missed under this subparagraph. 

16 (D) STATE VENUE REQUIREMENTS.— 

17 Nothing in this paragraph shall preempt or su18 persede any State’s law relating to venue re19 quirements within that State which are more 

20 restrictive. 

21 (E) CREDIT OF CLAIM AND EFFECT OF

22 OPERATIONAL OR NONOPERATIONAL FUND.— 

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

24 claim is pursued in Federal or State court 

25 in accordance with this paragraph, any reVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00044 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 covery by the claimant shall be a collateral 

2 source compensation for purposes of sec3 tion 134. 

4 (ii) OPERATIONAL FUND.—If the Ad5 ministrator subsequently certifies to Con6 gress that the Fund has become oper7 ational and paying all valid asbestos claims 

8 at a reasonable rate, any claim in a civil 

9 action in Federal or State court that is not 

10 actually on trial before a jury which has 

11 been impaneled and presentation of evi12 dence has commenced, but before its delib13 eration, or before a judge and is at the 

14 presentation of evidence, may, at the op15 tion of the claimant, be deemed a rein16 stated claim against the Fund and the civil 

17 action before the Federal or State court 

18 shall be null and void. 

19 (iii) NONOPERATIONAL FUND.—Not20 withstanding any other provision of this 

21 Act, if the Administrator subsequently cer22 tifies to Congress that the Fund cannot be23 come operational and paying all valid as24 bestos claims at a reasonable rate, all asVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00045 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 bestos claims that have a stay may be filed 

2 or reinstated. 

3 SEC. 107. AUTHORITY OF THE ADMINISTRATOR. 

4 The Administrator, on any matter within the jurisdic5 tion of the Administrator under this Act, may— 

6 (1) issue subpoenas for and compel the attend7 ance of witnesses within a radius of 200 miles; 

8 (2) administer oaths; 

9 (3) examine witnesses; 

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

11 documents, and other evidence; and 

12 (5) request assistance from other Federal agen13 cies with the performance of the duties of the Ad14 ministrator under this Act. 

15 Subtitle B—Asbestos Disease 

16 Compensation Procedures 

17 SEC. 111. ESSENTIAL ELEMENTS OF ELIGIBLE CLAIM. 

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

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

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

23 that the claimant suffers from an eligible disease or 

24 condition, as demonstrated by evidence that meets 

25 the requirements established under subtitle C. 


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1 SEC. 112. GENERAL RULE CONCERNING NO-FAULT COM2 PENSATION. 

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

5 claim is being made resulted from the negligence or other 

6 fault of any other person. 

7 SEC. 113. FILING OF CLAIMS. 

8 (a) WHO MAY SUBMIT.— 

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

11 meet the requirements established under subtitle C 

12 (or the personal representative of the individual, if 

13 the individual is deceased or incompetent) may file 

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

15 such injury. 

16 (2) DEFINITION.—In this Act, the term ‘‘per17 sonal representative’’ shall have the same meaning 

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

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

20 December 31, 2004. 

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

22 any person seeking contribution or indemnity. 

23 (b) STATUTE OF LIMITATIONS.— 

24 (1) IN GENERAL.—Except as otherwise pro25 vided in this subsection, if an individual fails to file 


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1 a claim with the Office under this section within 5 

2 years after the date on which the individual first— 

3 (A) received a medical diagnosis of an eli4 gible disease or condition as provided for under 

5 this subtitle and subtitle C; or 

6 (B) discovered facts that would have led a 

7 reasonable person to obtain a medical diagnosis 

8 with respect to an eligible disease or condition, 

9 any claim relating to that injury, and any other as10 bestos claim related to that injury, shall be extin11 guished, and any recovery thereon shall be prohib12 ited. 

13 (2) EXCEPTION.—The statute of limitations in 

14 paragraph (1) does not apply to the progression of 

15 nonmalignant diseases once the initial claim has 

16 been filed. 

17 (3) EFFECT ON PENDING CLAIMS.— 

18 (A) IN GENERAL.—If, on the date of en19 actment of this Act, an asbestos claimant has 

20 any timely filed asbestos claim that is pre21 empted under section 403(e), such claimant 

22 shall file a claim under this section within 5 

23 years after such date of enactment, or any 

24 claim relating to that injury, and any other as25 bestos claim related to that injury shall be exVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00048 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 tinguished, and recovery there shall be prohib2 ited. 

3 (B) SPECIAL RULE.—For purposes of this 

4 paragraph, a claim shall not be treated as pend5 ing with a trust established under title 11, 

6 United States Code, solely because a claimant 

7 whose claim was previously compensated by the 

8 trust has or alleges— 

9 (i) a non-contingent right to the pay10 ment of future installments of a fixed 

11 award; or 

12 (ii) a contingent right to recover some 

13 additional amount from the trust on the 

14 occurrence of a future event, such as the 

15 reevaluation of the trust’s funding ade16 quacy or projected claims experience. 

17 (4) EFFECT OF MULTIPLE INJURIES.— 

18 (A) IN GENERAL.—An asbestos claimant 

19 who receives an award under this title for an el20 igible disease or condition, and who subse21 quently develops another such injury, shall be 

22 eligible for additional awards under this title 

23 (subject to appropriate setoffs for such prior re24 covery of any award under this title and from 

25 any other collateral source) and the statute of 


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1 limitations under paragraph (1) shall not begin 

2 to run with respect to such subsequent injury 

3 until such claimant obtains a medical diagnosis 

4 of such other injury or discovers facts that 

5 would have led a reasonable person to obtain 

6 such a diagnosis. 

7 (B) SETOFFS.—Except as provided in sub8 paragraph (C), any amounts paid or to be paid 

9 for a prior award under this Act shall be de10 ducted as a setoff against amounts payable for 

11 the second injury claim. 

12 (C) EXCEPTION.—Any amounts paid or to 

13 be paid for a prior claim for a nonmalignant 

14 disease (Levels I through V) filed against the 

15 Fund shall not be deducted as a setoff against 

16 amounts payable for the second injury claim for 

17 a malignant disease (Levels VI through IX), 

18 unless the malignancy was diagnosed, or the as19 bestos claimant had discovered facts that would 

20 have led a reasonable person to obtain such a 

21 diagnosis, before the date on which the non22 malignancy claim was compensated. 

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

24 subsection (a) shall be in such form, and contain such in25 formation in such detail, as the Administrator shall by 


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1 regulation prescribe. At a minimum, a claim shall in2 clude— 

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

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

5 claimant; 

6 (2) information relating to the identity of de7 pendents and beneficiaries of the claimant; 

8 (3) an employment history sufficient to estab9 lish required asbestos exposure, accompanied by so10 cial security or other payment records or a signed 

11 release permitting access to such records; 

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

13 claimant, including, to the extent known, informa14 tion on the site, or location of exposure, and dura15 tion and intensity of exposure; 

16 (5) a description of the tobacco product use his17 tory of the claimant, including frequency and dura18 tion; 

19 (6) an identification and description of the as20 bestos-related diseases or conditions of the claimant, 

21 accompanied by a written report by the claimant’s 

22 physician with medical diagnoses and x-ray films, 

23 and other test results necessary to establish eligi24 bility for an award under this Act; 


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

2 action or other claim brought by the claimant for as3 bestos-related injury or any other pulmonary, paren4 chymal, or pleural injury, including an identification 

5 of any recovery of compensation or damages through 

6 settlement, judgment, or otherwise; and 

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

8 is a nonsmoker or an ex-smoker, as defined in sec9 tion 131, for purposes of an award under Malignant 

10 Level VI, Malignant Level VII, or Malignant Level 

11 VIII, evidence to support the assertion of non12 smoking or ex-smoking, including relevant medical 

13 records. 

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

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

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

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

18 earliest determinable date. 

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

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

21 the claimant of the information necessary to complete the 

22 claim and inform the claimant of such services as may 

23 be available through the Claimant Assistance Program es24 tablished under section 104 to assist the claimant in com25 pleting the claim. Any time periods for the processing of 


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1 the claim shall be suspended until such time as the claim2 ant submits the information necessary to complete the 

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

4 after the date of such notification, the claim shall be dis5 missed. 

6 SEC. 114. ELIGIBILITY DETERMINATIONS AND CLAIM 

7 AWARDS. 

8 (a) IN GENERAL.— 

9 (1) REVIEW OF CLAIMS.—The Administrator 

10 shall, in accordance with this section, determine 

11 whether each claim filed under the Fund or claims 

12 facility satisfies the requirements for eligibility for 

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

14 award. In making such determinations, the Adminis15 trator shall consider the claim presented by the 

16 claimant, the factual and medical evidence submitted 

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

18 determinations of any Physicians Panel to which a 

19 claim is referred under section 121, and the results 

20 of such investigation as the Administrator may deem 

21 necessary to determine whether the claim satisfies 

22 the criteria for eligibility established by this Act. 

23 (2) ADDITIONAL EVIDENCE.—The Adminis24 trator may request the submission of medical evi25 dence in addition to the minimum requirements of 


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

2 a determination of eligibility for an award, in which 

3 case the cost of obtaining such additional informa4 tion or testing shall be borne by the Office. 

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

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

7 to the claimant (and the claimant’s representative) a pro8 posed decision accepting or rejecting the claim in whole 

9 or in part and specifying the amount of the proposed 

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

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

12 shall contain an explanation of the procedure for obtaining 

13 review of the proposed decision. 

14 (c) PAYMENTS IF NO TIMELY PROPOSED DECI15 SION.—If the Administrator has received a complete claim 

16 and has not provided a proposed decision to the claimant 

17 under subsection (b) within 180 days after the filing of 

18 the claim, the claim shall be deemed accepted and the 

19 claimant shall be entitled to payment under section 

20 133(a)(2). If the Administrator subsequently rejects the 

21 claim the claimant shall receive no further payments under 

22 section 133. If the Administrator subsequently rejects the 

23 claim in part, the Administrator shall adjust future pay24 ments due the claimant under section 133 accordingly. In 


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1 no event may the Administrator recover amounts properly 

2 paid under this section from a claimant. 

3 (d) 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 

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1 tive shall receive such relevant evidence as the 

2 claimant adduces and such other evidence as 

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

5 (C) REQUEST FOR SUBPOENAS.— 

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

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

12 witnesses, and for the production of books, 

13 records, correspondence, papers, or other 

14 relevant documents. Subpoenas are issued 

15 for documents only if such documents are 

16 relevant and cannot be obtained by other 

17 means, and for witnesses only where oral 

18 testimony is the best way to ascertain the 

19 facts. 

20 (ii) REQUEST.—A claimant may re21 quest a subpoena only as part of the hear22 ing process. To request a subpoena, the re23 quester shall— 

24 (I) submit the request in writing 

25 and send it to the representative as 


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1 early as possible, but no later than 30 

2 days after the date of the original 

3 hearing request; and 

4 (II) explain why the testimony or 

5 evidence is directly relevant to the 

6 issues at hand, and a subpoena is the 

7 best method or opportunity to obtain 

8 such evidence because there are no 

9 other means by which the documents 

10 or testimony could have been ob11 tained. 

12 (iii) FEES AND MILEAGE.—Any per13 son required by such subpoena to attend as 

14 a witness shall be allowed and paid the 

15 same fees and mileage as are paid wit16 nesses in the district courts of the United 

17 States. Such fees and mileage shall be paid 

18 from the Fund. 

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

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

21 satisfied with a proposed decision of the Adminis22 trator shall have the option, on written request made 

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

24 decision, of obtaining a review of the written record 

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1 view is requested, the claimant shall be afforded an 

2 opportunity to submit any written evidence or argu3 ment which the claimant believes relevant. 

4 (e) FINAL DECISIONS.— 

5 (1) IN GENERAL.—If the period of time for re6 questing review of the proposed decision expires and 

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

8 any objections to the proposed decision, the Admin9 istrator shall issue a final decision. If such decision 

10 materially differs from the proposed decision, the 

11 claimant shall be entitled to review of the decision 

12 under subsection (d). 

13 (2) TIME AND CONTENT.—If the claimant re14 quests review of all or part of the proposed decision 

15 the Administrator shall issue a final decision on the 

16 claim not later than 180 days after the request for 

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

18 or not later than 90 days after the request for re19 view is received, if the claimant requests review of 

20 the written record. Such decision shall be in writing 

21 and contain findings of fact and conclusions of law. 

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

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

24 proceeding under this Act. 


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1 SEC. 115. MEDICAL EVIDENCE AUDITING PROCEDURES. 

2 (a) IN GENERAL.— 

3 (1) DEVELOPMENT.—The Administrator shall 

4 develop methods for auditing and evaluating the 

5 medical evidence submitted as part of a claim. The 

6 Administrator may develop additional methods for 

7 auditing and evaluating other types of evidence or 

8 information received by the Administrator. 

9 (2) REFUSAL TO CONSIDER CERTAIN EVI10 DENCE.— 

11 (A) IN GENERAL.—If the Administrator 

12 determines that an audit conducted in accord13 ance with the methods developed under para14 graph (1) demonstrates that the medical evi15 dence submitted by a specific physician or med16 ical facility is not consistent with prevailing 

17 medical practices or the applicable requirements 

18 of this Act, any medical evidence from such 

19 physician or facility shall be unacceptable for 

20 purposes of establishing eligibility for an award 

21 under this Act. 

22 (B) NOTIFICATION.—Upon a determina23 tion by the Administrator under subparagraph 

24 (A), the Administrator shall notify the physi25 cian or medical facility involved of the results of 

26 the audit. Such physician or facility shall have 


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1 a right to appeal such determination under pro2 cedures issued by the Administrator. 

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

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

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

8 cost of which shall be borne by the Office. 

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

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

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

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

19 take into account the findings of the 2 independent 

20 B readers in making the determination on such 

21 claim. 

22 (4) CERTIFIED B-READERS.—The Adminis23 trator shall maintain a list of a minimum of 50 cer24 tified B-readers eligible to participate in the inde25 pendent reviews, chosen from all certified B-readers. 


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

2 Administrator shall choose the certified B-reader at 

3 random from that list. 

4 (c) SMOKING ASSESSMENT.— 

5 (1) IN GENERAL.— 

6 (A) RECORDS AND DOCUMENTS.—To aid 

7 in the assessment of the accuracy of claimant 

8 representations as to their smoking status for 

9 purposes of determining eligibility and amount 

10 of award under Malignant Level VI, Malignant 

11 Level VII, or Malignant Level VIII, and excep12 tional medical claims, the Administrator shall 

13 have the authority to obtain relevant records 

14 and documents, including— 

15 (i) records of past medical treatment 

16 and evaluation; 

17 (ii) affidavits of appropriate individ18 uals; 

19 (iii) applications for insurance and 

20 supporting materials; and 

21 (iv) employer records of medical ex22 aminations. 

23 (B) CONSENT.—The claimant shall provide 

24 consent for the Administrator to obtain such 

25 records and documents where required. 


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

2 records and documents submitted under paragraph 

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

5 claimants asserting status as nonsmokers or ex6 smokers. 

7 (3) CONSENT.—The Administrator may require 

8 the performance of blood tests or any other appro9 priate medical test, such as serum cotinine screen10 ing, where claimants assert they are nonsmokers or 

11 ex-smokers for purposes of an award under Malig12 nant Level VI, Malignant Level VII, or Malignant 

13 Level VIII, or as an exceptional medical claim, the 

14 cost of which shall be borne by the Office. 

15 (4) PENALTY FOR FALSE STATEMENTS.—Any 

16 false information submitted under this subsection 

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

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

21 Subtitle C—Medical Criteria 

22 SEC. 121. MEDICAL CRITERIA REQUIREMENTS. 

23 (a) DEFINITIONS.—In this section, the following defi24 nitions shall apply: 


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1 (1) ASBESTOSIS DETERMINED BY PATHOL2 OGY.—The term ‘‘asbestosis determined by pathol3 ogy’’ means indications of asbestosis based on the 

4 pathological grading system for asbestosis described 

5 in the Special Issues of the Archives of Pathology 

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

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

11 bilateral asbestos-related nonmalignant disease 

12 based on— 

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

14 based on the ILO grade scale; 

15 (B) bilateral pleural plaques; 

16 (C) bilateral pleural thickening; or 

17 (D) bilateral pleural calcification. 

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

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

20 wall pleural thickening or plaque with a maximum 

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

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

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

25 by the National Institute of Occupational Safety and 


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

3 date. 

4 (5) DIFFUSE PLEURAL THICKENING.—The 

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

6 either costophrenic angle and bilateral pleural plaque 

7 or bilateral pleural thickening. 

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

10 monoxide) technique used to measure the volume of 

11 carbon monoxide transferred from the alveoli to 

12 blood in the pulmonary capillaries for each unit of 

13 driving pressure of the carbon monoxide. 

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

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

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

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

19 capacity, which is the maximal volume of air expired 

20 with a maximally forced effort from a position of 

21 maximal inspiration. 

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

23 means the radiological ratings for the presence of 

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


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1 as established from time to time by the International 

2 Labor Organization. 

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

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

5 of healthy populations as defined in the American 

6 Thoracic Society statement on lung function testing 

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

8 and any future revision of the same statement. 

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

10 means a claimant who— 

11 (A) never smoked; or 

12 (B) has smoked fewer than 100 cigarettes 

13 or the equivalent amount of other tobacco prod14 ucts during the claimant’s lifetime. 

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

16 pressure (tension) of oxygen, which measures the 

17 amount of dissolved oxygen in the blood. 

18 (13) PULMONARY FUNCTION TESTING.—The 

19 term ‘‘pulmonary function testing’’ means 

20 spirometry testing that is in material compliance 

21 with the quality criteria established by the American 

22 Thoracic Society and is performed on equipment 

23 which is in material compliance with the standards 

24 of the American Thoracic Society for technical qual25 ity and calibration. 


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1 (14) SUBSTANTIAL OCCUPATIONAL EXPOSURE

2 TO ASBESTOS.— 

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

4 occupational exposure’’ means employment in 

5 an industry and an occupation where for a sub6 stantial portion of a normal work year for that 

7 occupation, the claimant— 

8 (i) handled raw asbestos fibers; 

9 (ii) fabricated asbestos-containing 

10 products so that the claimant in the fab11 rication process was exposed to raw asbes12 tos fibers; 

13 (iii) altered, repaired, or otherwise 

14 worked with an asbestos-containing prod15 uct such that the claimant was exposed on 

16 a regular basis to asbestos fibers; or 

17 (iv) worked in close proximity to other 

18 workers engaged in the activities described 

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

20 claimant was exposed on a regular basis to 

21 asbestos fibers. 

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

23 the term ‘‘on a regular basis’’ means on a fre24 quent or recurring basis. 


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

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

3 after maximal inspiration. 

4 (16) WEIGHTED OCCUPATIONAL EXPOSURE.— 

5 (A) IN GENERAL.—The term ‘‘weighted oc6 cupational exposure’’ means exposure for a pe7 riod of years calculated according to the expo8 sure weighting formula under subparagraphs 

9 (B) through (E). 

10 (B) MODERATE EXPOSURE.—Subject to 

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

12 primary occupation, during a substantial por13 tion of a normal work year for that occupation, 

14 involved working in areas immediate to where 

15 asbestos-containing products were being in16 stalled, repaired, or removed under cir17 cumstances that involved regular airborne emis18 sions of asbestos fibers, shall count as 1 year 

19 of substantial occupational exposure. 

20 (C) HEAVY EXPOSURE.—Subject to sub21 paragraph (E), each year that a claimant’s pri22 mary occupation, during a substantial portion 

23 of a normal work year for that occupation, in24 volved the direct installation, repair, or removal 

25 of asbestos-containing products such that the 


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1 person was exposed on a regular basis to asbes2 tos fibers, shall count as 2 years of substantial 

3 occupational exposure. 

4 (D) VERY HEAVY EXPOSURE.—Subject to 

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

6 primary occupation, during a substantial por7 tion of a normal work year for that occupation, 

8 was in primary asbestos manufacturing, a 

9 World War II shipyard, or the asbestos insula10 tion trades, such that the person was exposed 

11 on a regular basis to asbestos fibers, shall count 

12 as 4 years of substantial occupational exposure. 

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

14 exposure calculated under subparagraphs (B), 

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

16 counted at its full value. Each year from 1976 

to 1986 shall be counted as 1 17 ⁄2 of its value. 

Each year after 1986 shall be counted as 1 18 ⁄10

19 of its value. 

20 (F) OTHER CLAIMS.—Individuals who do 

21 not meet the provisions of subparagraphs (A) 

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

23 post-1986 exposures exceeded the Occupational 

24 Safety and Health Administration standard 

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1 tory, or other information to substantiate non2 compliance with the Occupational Safety and 

3 Health Administration standard (such as lack 

4 of engineering or work practice controls, or pro5 tective equipment) such that exposures would 

6 be equivalent to exposures before 1976 or 1986, 

7 or to documented exposures in similar jobs or 

8 occupations where control measures had not 

9 been implemented. Claims under this subpara10 graph shall be evaluated on an individual basis 

11 by a Physicians Panel. 

12 (b) MEDICAL EVIDENCE.— 

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

14 diagnoses of an asbestos-related disease for a level 

15 under this section shall be accompanied by— 

16 (A) a statement by the physician providing 

17 the diagnosis that at least 10 years have 

18 elapsed between the date of first exposure to as19 bestos or asbestos-containing products and the 

20 diagnosis; or 

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

22 that is sufficient to establish a 10-year latency 

23 period between the date of first exposure to as24 bestos or asbestos-containing products and the 

25 diagnosis. 


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1 (2) DIAGNOSTIC GUIDELINES.—All diagnoses of 

2 asbestos-related diseases shall be based upon— 

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

4 case of a claimant who was living at the time 

5 the claim was filed— 

6 (i) a physical examination of the 

7 claimant by the physician providing the di8 agnosis; 

9 (ii) an evaluation of smoking history 

10 and exposure history before making a diag11 nosis; 

12 (iii) an x-ray reading by a certified B13 reader; and 

14 (iv) pulmonary function testing in the 

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

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

17 case of a claimant who was deceased at the 

18 time the claim was filed, a report from a physi19 cian based upon a review of the claimant’s med20 ical records which shall include— 

21 (i) pathological evidence of the non22 malignant asbestos-related disease; or 

23 (ii) an x-ray reading by a certified B24 reader; 


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

2 the case of a claimant who was living at the 

3 time the claim was filed— 

4 (i) a physical examination by the 

5 claimant’s physician providing the diag6 nosis; or 

7 (ii) a diagnosis of such a malignant 

8 asbestos-related disease, as described in 

9 this section, by a board-certified patholo10 gist; and 

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

12 the case of a claimant who was deceased at the 

13 time the claim was filed— 

14 (i) a diagnosis of such a malignant as15 bestos-related disease, as described in this 

16 section, by a board-certified pathologist; 

17 and 

18 (ii) a report from a physician based 

19 upon a review of the claimant’s medical 

20 records. 

21 (3) CREDIBILITY OF MEDICAL EVIDENCE.—To 

22 ensure the medical evidence provided in support of 

23 a claim is credible and consistent with recognized 

24 medical standards, a claimant under this title may 

25 be required to submit— 


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1 (A) x-rays or computerized tomography; 

2 (B) detailed results of pulmonary function 

3 tests; 

4 (C) laboratory tests; 

5 (D) tissue samples; 

6 (E) results of medical examinations; 

7 (F) reviews of other medical evidence; and 

8 (G) medical evidence that complies with 

9 recognized medical standards regarding equip10 ment, testing methods, and procedure to ensure 

11 the reliability of such evidence as may be sub12 mitted. 

13 (c) EXPOSURE EVIDENCE.— 

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

15 level, the claimant shall demonstrate— 

16 (A) a minimum exposure to asbestos or as17 bestos-containing products; 

18 (B) the exposure occurred in the United 

19 States, its territories or possessions, or while a 

20 United States citizen, while an employee of an 

21 entity organized under any Federal or State law 

22 regardless of location, or while a United States 

23 citizen while serving on any United States 

24 flagged or owned ship, provided the exposure 

25 results from such employment or service; and 


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1 (C) any additional asbestos exposure re2 quirement under this section. 

3 (2) PROOF OF EXPOSURE.— 

4 (A) AFFIDAVITS.—Exposure to asbestos 

5 sufficient to satisfy the exposure requirements 

6 for any disease level may be established by an 

7 affidavit of— 

8 (i) the claimant; or 

9 (ii) if the claimant is deceased, a co10 worker or a family member, if the affidavit 

11 of the claimant, co-worker, or family mem12 ber is found in proceedings under this title 

13 to be reasonably reliable, attesting to the 

14 claimant’s exposure; and is credible and is 

15 not contradicted by other evidence. 

16 (B) OTHER PROOF.—Exposure to asbestos 

17 may alternatively be established by invoices, 

18 construction or other similar records, or any 

19 other reasonably reliable evidence. 

20 (3) TAKE-HOME EXPOSURE.— 

21 (A) IN GENERAL.—A claimant may alter22 natively satisfy the medical criteria require23 ments of this section where a claim is filed by 

24 a person who alleges their exposure to asbestos 

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


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1 the claim had been filed by that person, would 

2 have met the exposure criteria for the given dis3 ease level, and the claimant lived with such per4 son for the time period necessary to satisfy the 

5 exposure requirement, for the claimed disease 

6 level. 

7 (B) REVIEW.—Except for claims for dis8 ease Level IX (mesothelioma), all claims alleg9 ing take-home exposure shall be submitted as 

10 an exceptional medical claim under section 

11 121(f) for review by a Physicians Panel. 

12 (4) WAIVER FOR WORKERS AND RESIDENTS OF

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

14 the asbestos exposure related to the vermiculite min15 ing and milling operations in Libby, Montana, the 

16 Administrator shall waive the exposure requirements 

17 under this subtitle for individuals who worked at the 

18 vermiculite mining and milling facility in Libby, 

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

20 of Libby, Montana, for at least 12 consecutive 

21 months before December 31, 2004. Claimants under 

22 this section shall provide such supporting docu23 mentation as the Administrator shall require. 

24 (5) EXPOSURE PRESUMPTIONS.— 


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1 (A) IN GENERAL.—The Administrator 

2 shall prescribe rules identifying specific indus3 tries, occupations within such industries, and 

4 time periods in which workers employed in 

5 those industries or occupations typically had 

6 substantial occupational exposure to asbestos as 

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

8 after the Administrator certifies that the Fund 

9 is paying claims at a reasonable rate, the indus10 tries, occupations and time periods identified by 

11 the Administrator shall at a minimum include 

12 those identified in the 2002 Trust Distribution 

13 Process of the Manville Personal Injury Settle14 ment Trust as of January 1, 2005, as indus15 tries, occupations and time periods in which 

16 workers were presumed to have had significant 

17 occupational exposure to asbestos. Thereafter, 

18 the Administrator may by rule modify or elimi19 nate those exposure presumptions required to 

20 be adopted from the Manville Personal Injury 

21 Settlement Trust, if there is evidence that dem22 onstrates that the typical exposure for workers 

23 in such industries and occupations during such 

24 time periods did not constitute substantial occu25 pational exposure in asbestos. 


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

3 through meaningful and credible evidence that 

4 such claimant was employed during relevant 

5 time periods in industries or occupations identi6 fied under subparagraph (A) shall be entitled to 

7 a presumption that the claimant had substan8 tial occupational exposure to asbestos during 

9 those time periods. That presumption shall not 

10 be conclusive, and the Administrator may find 

11 that the claimant does not have substantial oc12 cupational exposure if other information dem13 onstrates that the claimant did not in fact have 

14 substantial occupational exposure during any 

15 part of the relevant time periods. 

16 (6) PENALTY FOR FALSE STATEMENT.—Any 

17 false information submitted under this subsection 

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

19 States Code (as added by this Act). 

20 (d) ASBESTOS DISEASE LEVELS.— 

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

22 I compensation, a claimant shall provide— 

23 (A) a diagnosis of bilateral asbestos-related 

24 nonmalignant disease; and 


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1 (B) evidence of 5 years cumulative occupa2 tional exposure to asbestos. 

3 (2) NONMALIGNANT LEVEL II.—To receive 

4 Level II compensation, a claimant shall provide— 

5 (A) a diagnosis of bilateral asbestos-related 

6 nonmalignant disease with ILO grade of 1/1 or 

7 greater, and showing small irregular opacities 

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

9 in both lower lung zones, or asbestosis deter10 mined by pathology, or blunting of either 

11 costophrenic angle and bilateral pleural plaque 

12 or bilateral pleural thickening of at least grade 

13 B2 or greater, or bilateral pleural disease of 

14 grade B2 or greater; 

15 (B) evidence of TLC less than 80 percent 

16 or FVC less than the lower limits of normal, 

17 and FEV1/FVC ratio less than 65 percent; 

18 (C) evidence of 5 or more weighted years 

19 of substantial occupational exposure to asbes20 tos; and 

21 (D) supporting medical documentation es22 tablishing asbestos exposure as a substantial 

23 contributing factor in causing the pulmonary 

24 condition in question. 


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1 (3) NONMALIGNANT LEVEL III.—To receive 

2 Level III compensation a claimant shall provide— 

3 (A) a diagnosis of bilateral asbestos-related 

4 nonmalignant disease with ILO grade of 1/0 or 

5 greater and showing small irregular opacities of 

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

7 in both lower lung zones, or asbestosis deter8 mined by pathology, or diffuse pleural thick9 ening, or bilateral pleural disease of B2 or 

10 greater; 

11 (B) evidence of TLC less than 80 percent, 

12 FVC less than the lower limits of normal and 

13 FEV1/FVC ratio greater than or equal to 65 

14 percent, or evidence of a decline in FVC of 20 

15 percent or greater, after allowing for the ex16 pected decrease due to aging, and an FEV1/ 

17 FVC ratio greater than or equal to 65 percent 

18 documented with a second spirometry; 

19 (C) evidence of 5 or more weighted years 

20 of substantial occupational exposure to asbes21 tos; and 

22 (D) supporting medical documentation— 

23 (i) establishing asbestos exposure as a 

24 substantial contributing factor in causing 

25 the pulmonary condition in question; and 


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1 (ii) excluding other more likely causes 

2 of that pulmonary condition. 

3 (4) NONMALIGNANT LEVEL IV.—To receive 

4 Level IV 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 

9 in both lower lung zones, or asbestosis deter10 mined by pathology, or diffuse pleural thick11 ening, or bilateral pleural disease of B2 or 

12 greater; 

13 (B) evidence of TLC less than 60 percent 

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

15 ratio greater than or equal to 65 percent; 

16 (C) evidence of 5 or more weighted years 

17 of substantial occupational exposure to asbestos 

18 before diagnosis; and 

19 (D) supporting medical documentation— 

20 (i) establishing asbestos exposure as a 

21 substantial contributing factor in causing 

22 the pulmonary condition in question; and 

23 (ii) excluding other more likely causes 

24 of that pulmonary condition. 


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1 (5) NONMALIGNANT LEVEL V.—To receive 

2 Level V compensation a claimant shall provide— 

3 (A) diagnosis of bilateral asbestos-related 

4 nonmalignant disease with ILO grade of 1/1 or 

5 greater and showing small irregular opacities of 

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

7 in both lower lung zones, or asbestosis deter8 mined by pathology, or diffuse pleural thick9 ening, or bilateral pleural disease of B2 or 

10 greater; 

11 (B)(i) evidence of TLC less than 50 per12 cent or FVC less than 50 percent, and FEV1/ 

13 FVC ratio greater than or equal to 65 percent; 

14 (ii) DLCO less than 40 percent of pre15 dicted, plus a FEV1/FVC ratio not less than 65 

16 percent; or 

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

18 FEV1/FVC ratio not less than 65 percent; 

19 (C) evidence of 5 or more weighted years 

20 of substantial occupational exposure to asbes21 tos; and 

22 (D) supporting medical documentation— 

23 (i) establishing asbestos exposure as a 

24 substantial contributing factor in causing 

25 the pulmonary condition in question; and 


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1 (ii) excluding other more likely causes 

2 of that pulmonary condition. 

3 (6) MALIGNANT LEVEL VI.— 

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

5 compensation a claimant shall provide— 

6 (i) a diagnosis of a primary colorectal, 

7 laryngeal, esophageal, pharyngeal, or stom8 ach cancer on the basis of findings by a 

9 board certified pathologist; 

10 (ii) evidence of a bilateral asbestos-re11 lated nonmalignant disease; 

12 (iii) evidence of 15 or more weighted 

13 years of substantial occupational exposure 

14 to asbestos; and 

15 (iv) supporting medical documentation 

16 establishing asbestos exposure as a sub17 stantial contributing factor in causing the 

18 cancer in question. 

19 (B) REFERRAL TO PHYSICIANS PANEL.— 

20 All claims filed with respect to Level VI under 

21 this paragraph shall be referred to a Physicians 

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

25 cancer in question. If the claimant meets the 


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1 requirements of subparagraph (A), there shall 

2 be a presumption of eligibility for the scheduled 

3 value of compensation unless there is evidence 

4 determined by the Physicians Panel that rebuts 

5 that presumption. In making its determination 

6 under this subparagraph, the Physicians Panel 

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

12 history as part of their claim submission. 

13 (7) MALIGNANT LEVEL VII.— 

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

15 compensation, a claimant shall provide— 

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

18 board certified pathologist; 

19 (ii) evidence of bilateral pleural 

20 plaques or bilateral pleural thickening or 

21 bilateral pleural calcification; 

22 (iii) evidence of 12 or more weighted 

23 years of substantial occupational exposure 

24 to asbestos; and 


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1 (iv) supporting medical documentation 

2 establishing asbestos exposure as a sub3 stantial contributing factor in causing the 

4 lung cancer in question. 

5 (B) PHYSICIANS PANEL.—A claimant filing 

6 a claim relating to Level VII under this para7 graph may request that the claim be referred to 

8 a Physicians Panel for a determination of 

9 whether the claimant qualifies for the disease 

10 category and relevant smoking status. In mak11 ing its determination under this subparagraph, 

12 the Physicians Panel shall consider the inten13 sity and duration of exposure, smoking history, 

14 and the quality of evidence relating to exposure 

15 and smoking. Claimants shall bear the burden 

16 of producing meaningful and credible evidence 

17 of their smoking history as part of their claim 

18 submission. 

19 (8) MALIGNANT LEVEL VIII.— 

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

21 compensation, a claimant shall provide a diag22 nosis— 

23 (i) of a primary lung cancer disease 

24 on the basis of findings by a board cer25 tified pathologist; 


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1 (ii)(I) of— 

2 (aa) asbestosis based on a chest 

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

4 and showing small irregular opacities 

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

6 and present in both lower lung zones; 

7 and 

8 (bb) 10 or more weighted years 

9 of substantial occupational exposure 

10 to asbestos; 

11 (II) of— 

12 (aa) asbestosis based on a chest 

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

14 and showing small irregular opacities 

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

16 and present in both lower lung zones; 

17 and 

18 (bb) 8 or more weighted years of 

19 substantial occupational exposure to 

20 asbestos; 

21 (III) asbestosis determined by pathol22 ogy and 10 or more weighted years of sub23 stantial occupational exposure to asbestos; 

24 or 


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1 (IV) asbestosis as determined by CT 

2 Scan, the cost of which shall not be borne 

3 by the Fund. The CT Scan must be inter4 preted by a board certified radiologist and 

5 confirmed by a board certified radiologist; 

6 and 

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

9 substantial contributing factor in causing 

10 the lung cancer in question; and 10 or 

11 more weighted years of substantial occupa12 tional exposure to asbestos. 

13 (B) PHYSICIANS PANEL.—A claimant filing 

14 a claim with respect to Level VIII under this 

15 paragraph may request that the claim be re16 ferred to a Physicians Panel for a determina17 tion of whether the claimant qualifies for the 

18 disease category and relevant smoking status. 

19 In making its determination under this sub20 paragraph, the Physicians Panel shall consider 

21 the intensity and duration of exposure, smoking 

22 history, and the quality of evidence relating to 

23 exposure and smoking. Claimants shall bear the 

24 burden of producing meaningful and credible 


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1 evidence of their smoking history as part of 

2 their claim submission. 

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

4 IX compensation, a claimant shall provide— 

5 (A) a diagnosis of malignant mesothelioma 

6 disease on the basis of findings by a board cer7 tified pathologist; and 

8 (B) credible evidence of identifiable expo9 sure to asbestos resulting from— 

10 (i) occupational exposure to asbestos; 

11 (ii) exposure to asbestos fibers 

12 brought into the home of the claimant by 

13 a worker occupationally exposed to asbes14 tos; 

15 (iii) exposure to asbestos fibers result16 ing from living or working in the proxi17 mate vicinity of a factory, shipyard, build18 ing demolition site, or other operation that 

19 regularly released asbestos fibers into the 

20 air due to operations involving asbestos at 

21 that site; or 

22 (iv) other identifiable exposure to as23 bestos fibers, in which case the claim shall 

24 be reviewed by a Physicians Panel under 


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1 section 121(f) for a determination of eligi2 bility. 

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

4 than April 1, 2006, the Institute of Medicine of the Na5 tional Academy of Sciences shall complete a study con6 tracted with the National Institutes of Health of the caus7 al link between asbestos exposure and other cancers, in8 cluding colorectal, laryngeal, esophageal, pharyngeal, and 

9 stomach cancers, except for mesothelioma and lung can10 cers. The Institute of Medicine shall issue a report on its 

11 findings on causation, which shall be transmitted to Con12 gress, the Administrator, the Advisory Committee on As13 bestos Disease Compensation or the Medical Advisory 

14 Committee, and the Physicians Panels. The Institute of 

15 Medicine report shall be binding on the Administrator and 

16 the Physicians Panels for purposes of determining whether 

17 asbestos exposure is a substantial contributing factor 

18 under section 121(d)(6)(B). 

19 (f) EXCEPTIONAL MEDICAL CLAIMS.— 

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

21 meet the medical criteria requirements under this 

22 section may apply for designation of the claim as an 

23 exceptional medical claim. 


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1 (2) APPLICATION.—When submitting an appli2 cation for review of an exceptional medical claim, the 

3 claimant shall— 

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

5 medical criteria requirements under this sec6 tion; or 

7 (B) seek designation as an exceptional 

8 medical claim within 60 days after a determina9 tion that the claim is ineligible solely for failure 

10 to meet the medical criteria requirements under 

11 subsection (d). 

12 (3) REPORT OF PHYSICIAN.— 

13 (A) IN GENERAL.—Any claimant applying 

14 for designation of a claim as an exceptional 

15 medical claim shall support an application filed 

16 under paragraph (1) with a report from a phy17 sician meeting the requirements of this section. 

18 (B) CONTENTS.—A report filed under sub19 paragraph (A) shall include— 

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

21 medical history and current condition; 

22 (ii) such additional material by way of 

23 analysis and documentation as shall be 

24 prescribed by rule of the Administrator; 

25 and 


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1 (iii) a detailed explanation as to why 

2 the claim meets the requirements of para3 graph (4)(B). 

4 (4) REVIEW.— 

5 (A) IN GENERAL.—The Administrator 

6 shall refer all applications and supporting docu7 mentation submitted under paragraph (2) to a 

8 Physicians Panel for review for eligibility as an 

9 exceptional medical claim. 

10 (B) STANDARD.—A claim shall be des11 ignated as an exceptional medical claim if the 

12 claimant, for reasons beyond the control of the 

13 claimant, cannot satisfy the requirements under 

14 this section, but is able, through comparably re15 liable evidence that meets the standards under 

16 this section, to show that the claimant has an 

17 asbestos-related condition that is substantially 

18 comparable to that of a medical condition that 

19 would satisfy the requirements of a category 

20 under this section. 

21 (C) ADDITIONAL INFORMATION.—A Physi22 cians Panel may request additional reasonable 

23 testing to support the claimant’s application. 

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

25 CT Scan in addition to an x-ray. 


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1 (5) APPROVAL.— 

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

3 determines that the medical evidence is suffi4 cient to show a comparable asbestos-related 

5 condition, it shall issue a certificate of medical 

6 eligibility designating the category of asbestos7 related injury under this section for which the 

8 claimant shall be eligible to seek compensation. 

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

10 certificate under subparagraph (A), the Physi11 cians Panel shall submit the claim to the Ad12 ministrator, who shall give due consideration to 

13 the recommendation of the Physicians Panel in 

14 determining whether the claimant meets the re15 quirements for compensation under this Act. 

16 (6) RESUBMISSION.—Any claimant whose appli17 cation for designation as an exceptional medical 

18 claim is rejected may resubmit an application if new 

19 evidence becomes available. The application shall 

20 identify any prior applications and state the new evi21 dence that forms the basis of the resubmission. 

22 (7) RULES.—The Administrator shall promul23 gate rules governing the procedures for seeking des24 ignation of a claim as an exceptional medical claim. 

25 (8) LIBBY, MONTANA.— 


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1 (A) IN GENERAL.—A Libby, Montana, 

2 claimant may elect to have the claimant’s 

3 claims designated as exceptional medical claims 

4 and referred to a Physicians Panel for review. 

5 In reviewing the medical evidence submitted by 

6 a Libby, Montana claimant in support of that 

7 claim, the Physicians Panel shall take into con8 sideration the unique and serious nature of as9 bestos exposure in Libby, Montana, including 

10 the nature of the pleural disease related to as11 bestos exposure in Libby, Montana. 

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

13 through IV filed by Libby, Montana claimants, 

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

15 Administrator or the Physicians Panel issues a 

16 certificate of medical eligibility to a Libby, 

17 Montana claimant, and notwithstanding the dis18 ease category designated in the certificate or 

19 the eligible disease or condition established in 

20 accordance with this section, or the value of the 

21 award determined in accordance with section 

22 114, the Libby, Montana claimant shall be enti23 tled to an award that is not less than that 

24 awarded to claimants who suffer from asbes25 tosis, Level IV. For all malignant claims filed 


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1 by Libby, Montana claimants, the Libby, Mon2 tana claimant shall be entitled to an award that 

3 corresponds to the malignant disease category 

4 designated by the Administrator or the Physi5 cians Panel. 

6 Subtitle D—Awards 

7 SEC. 131. AMOUNT. 

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

9 the requirements of section 111 shall be entitled to an 

10 award in an amount determined by reference to the benefit 

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

12 (b) BENEFIT TABLE.— 

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

14 an eligible disease or condition established in accord15 ance with section 121 shall be eligible for an award 

16 as determined under this subsection. The award for 

17 all asbestos claimants with an eligible disease or con18 dition established in accordance with section 121 

19 shall be according to the following schedule: 

Level Scheduled Condition or Disease Scheduled Value 

I Asbestosis/Pleural 

Disease A 

Medical Monitoring 

II Mixed Disease With 

Impairment 

$25,000 

III Asbestosis/Pleural 

Disease B 

$100,000 

IV Severe Asbestosis $400,000 

V Disabling Asbestosis $850,000 

VI Other Cancer $200,000 


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VII Lung Cancer With 

Pleural Disease 

smokers, $300,000;

ex-smokers, $725,000;

non-smokers, $800,000 

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

ex-smokers, $975,000;

non-smokers, $1,100,000 

IX Mesothelioma $1,100,000 

1 (2) DEFINITIONS.—In this section— 

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

4 (i) never smoked; or 

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

7 products during the claimant’s lifetime; 

8 and 

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

11 the 12-year period preceding the diagnosis of 

12 lung cancer. 

13 (3) LEVEL IX ADJUSTMENTS.— 

14 (A) IN GENERAL.—If the Administrator 

15 determines that the impact of all adjustments 

16 under this paragraph on the Fund is cost neu17 tral, the Administrator may— 

18 (i) increase awards for Level IX 

19 claimants who are less than 51 years of 

20 age with dependent children; and 

21 (ii) decrease awards for Level IX 

22 claimants who are at least 65 years of age, 


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1 but in no case shall an award for Level IX 

2 be less than $1,000,000. 

3 (B) IMPLEMENTATION.—Before making 

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

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

8 (4) SPECIAL ADJUSTMENT FOR FELA CASES.— 

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

10 be eligible to bring a claim under the Act of 

11 April 22, 1908 (45 U.S.C. 51 et seq.), com12 monly known as the Employers’ Liability Act, 

13 but for section 403 of this Act, shall be eligible 

14 for a special adjustment under this paragraph. 

15 (B) REGULATIONS.— 

16 (i) IN GENERAL.—Not later than 90 

17 days after the date of enactment of this 

18 Act, the Administrator shall promulgate 

19 regulations relating to special adjustments 

20 under this paragraph. 

21 (ii) JOINT PROPOSAL.—Not later than 

22 45 days after the date of enactment of this 

23 Act, representatives of railroad manage24 ment and representatives of railroad labor 

25 shall submit to the Administrator a joint 


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1 proposal for regulations describing the eli2 gibility for and amount of special adjust3 ments under this paragraph. If a joint pro4 posal is submitted, the Administrator shall 

5 promulgate regulations that reflect the 

6 joint proposal. 

7 (iii) ABSENCE OF JOINT PROPOSAL.— 

8 If railroad management and railroad labor 

9 are unable to agree on a joint proposal 

10 within 45 days after the date of enactment 

11 of this Act, the benefits prescribed in sub12 paragraph (E) shall be the benefits avail13 able to claimants, and the Administrator 

14 shall promulgate regulations containing 

15 such benefits. 

16 (iv) REVIEW.—The parties partici17 pating in the arbitration may file in the 

18 United States District Court for the Dis19 trict of Columbia a petition for review of 

20 the Administrator’s order. The court shall 

21 have jurisdiction to affirm the order of the 

22 Administrator, or to set it aside, in whole 

23 or in part, or it may remand the pro24 ceedings to the Administrator for such fur25 ther action as it may direct. On such reVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00095 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 view, the findings and order of the Admin2 istrator shall be conclusive on the parties, 

3 except that the order of the Administrator 

4 may be set aside, in whole or in parts or 

5 remanded to the Administrator, for failure 

6 of the Administrator to comply with the re7 quirements of this section, for failure of 

8 the order to conform, or confine itself, to 

9 matters within the scope of the Adminis10 trator’s jurisdiction, or for fraud or cor11 ruption. 

12 (C) ELIGIBILITY.—An individual eligible to 

13 file a claim under the Act of April 22, 1908 (45 

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

15 Employers’ Liability Act, shall be eligible for a 

16 special adjustment under this paragraph if such 

17 individual meets the criteria set forth in sub18 paragraph (F). 

19 (D) AMOUNT.— 

20 (i) IN GENERAL.—The amount of the 

21 special adjustment shall be based on the 

22 type and severity of asbestos disease, and 

23 shall be 110 percent of the average amount 

24 an injured individual with a disease caused 

25 by asbestos, as described in section 121(d) 


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1 of this Act, would have received, during 

2 the 5-year period before the enactment of 

3 this Act, adjusted for inflation. This ad4 justment shall be in addition to any other 

5 award for which the claimant is eligible 

6 under this Act. The amount of the special 

7 adjustment shall be reduced by an amount 

8 reasonably calculated to take into account 

9 all expenses of litigation normally borne by 

10 plaintiffs, including attorney’s fees. 

11 (ii) LIMITATION.—The amount under 

12 clause (i) may not exceed the amount the 

13 claimant is eligible to receive before apply14 ing the special adjustment under that 

15 clause. 

16 (E) ARBITRATED BENEFITS.—If railroad 

17 management and railroad labor are unable to 

18 agree on a joint proposal within 45 days after 

19 the date of enactment of this Act, the Adminis20 trator shall appoint an arbitrator to determine 

21 the benefits under subparagraph (D). The Ad22 ministrator shall appoint an arbitrator who 

23 shall be acceptable to both railroad manage24 ment and railroad labor. Railroad management 

25 and railroad labor shall each designate their 


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1 representatives to participate in the arbitration. 

2 The arbitrator shall submit the benefits levels 

3 to the Administrator not later than 30 days 

4 after appointment and such benefits levels shall 

5 be based on information provided by rail labor 

6 and rail management. The information sub7 mitted to the arbitrator by railroad manage8 ment and railroad labor shall be considered con9 fidential and shall be disclosed to the other 

10 party upon execution of an appropriate con11 fidentiality agreement. Unless the submitting 

12 party provides written consent, neither the arbi13 trator nor either party to the arbitration shall 

14 divulge to any third party any information or 

15 data, in any form, submitted to the arbitrator 

16 under this section. Nor shall either party use 

17 such information or data for any purpose other 

18 than participation in the arbitration proceeding, 

19 and each party shall return to the other any in20 formation it has received from the other party 

21 as soon the arbitration is concluded. Informa22 tion submitted to the arbitrator may not be ad23 mitted into evidence, nor discovered, in any civil 

24 litigation in Federal or State court. The nature 

25 of the information submitted to the arbitrator 


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1 shall be within the sole discretion of the submit2 ting party, and the arbitrator may not require 

3 a party to submit any particular information, 

4 including information subject to a prior con5 fidentiality agreement. 

6 (F) DEMONSTRATION OF ELIGIBILITY.— 

7 (i) IN GENERAL.—A claimant under 

8 this paragraph shall be required to dem9 onstrate— 

10 (I) employment of the claimant 

11 in the railroad industry; 

12 (II) exposure of the claimant to 

13 asbestos as part of that employment; 

14 and 

15 (III) the nature and severity of 

16 the asbestos-related injury. 

17 (ii) MEDICAL CRITERIA.—In order to 

18 be eligible for a special adjustment a 

19 claimant shall meet the criteria set forth in 

20 section 121 that would qualify a claimant 

21 for a payment under Level II or greater. 

22 (5) MEDICAL MONITORING.—An asbestos claim23 ant with asymptomatic exposure, based on the cri24 teria under section 121(d)(1), shall only be eligible 


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1 for medical monitoring reimbursement as provided 

2 under section 132. 

3 (6) COST-OF-LIVING ADJUSTMENT.— 

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

5 2007, award amounts under paragraph (1) 

6 shall be annually increased by an amount equal 

7 to such dollar amount multiplied by the cost-of8 living adjustment, rounded to the nearest 

9 $1,000 increment. 

10 (B) CALCULATION OF COST-OF-LIVING AD11 JUSTMENT.—For the purposes of subparagraph 

12 (A), the cost-of-living adjustment for any cal13 endar year shall be the percentage, if any, by 

14 which the consumer price index for the suc15 ceeding calendar year exceeds the consumer 

16 price index for calendar year 2005. 

17 (C) CONSUMER PRICE INDEX.— 

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

19 subparagraph (B), the consumer price 

20 index for any calendar year is the average 

21 of the consumer price index as of the close 

22 of the 12-month period ending on August 

23 31 of such calendar year. 

24 (ii) DEFINITION.—For purposes of 

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


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1 index’’ means the consumer price index 

2 published by the Department of Labor. 

3 The consumer price index series to be used 

4 for award escalations shall include the con5 sumer price index used for all-urban con6 sumers, with an area coverage of the 

7 United States city average, for all items, 

8 based on the 1982–1984 index based pe9 riod, as published by the Department of 

10 Labor. 

11 SEC. 132. MEDICAL MONITORING. 

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

13 filing of a claim under this Act that seeks reimbursement 

14 for medical monitoring shall not be considered as evidence 

15 that the claimant has discovered facts that would other16 wise commence the period applicable for purposes of the 

17 statute of limitations under section 113(b). 

18 (b) COSTS.—Reimbursable medical monitoring costs 

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

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

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

22 (c) REGULATIONS.—The Administrator shall promul23 gate regulations that establish— 

24 (1) the reasonable costs for medical monitoring 

25 that is reimbursable; and 


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1 (2) the procedures applicable to asbestos claim2 ants. 

3 SEC. 133. PAYMENT. 

4 (a) STRUCTURED PAYMENTS.— 

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

6 entitled to an award should receive the amount of 

7 the award through structured payments from the 

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

9 event more than 4 years after the date of final adju10 dication of the claim. 

11 (2) PAYMENT PERIOD AND AMOUNT.—There 

12 shall be a presumption that any award paid under 

13 this subsection shall provide for payment of— 

14 (A) 40 percent of the total amount in year 

15 1; 

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

17 2; and 

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

19 3. 

20 (3) EXTENSION OF PAYMENT PERIOD.— 

21 (A) IN GENERAL.—The Administrator 

22 shall develop guidelines to provide for the pay23 ment period of an award under subsection (a) 

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

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1 vency of the Fund. Such guidelines shall include 

2 reference to the number of claims made to the 

3 Fund and the awards made and scheduled to be 

4 paid from the Fund as provided under section 

5 405. 

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

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

8 2 years of the payment period under this sub9 section. 

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

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

17 structured payment plan for the claimant. 

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

22 asbestos-related injury. 

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

24 to receive any payments to which that claimant is 

25 entitled under this title in the form of an annuity. 


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1 (b) LIMITATION ON TRANSFERABILITY.—A claim 

2 filed under this Act shall not be assignable or otherwise 

3 transferable under this Act. 

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

5 exempt from all claims of creditors and from levy, execu6 tion, and attachment or other remedy for recovery or col7 lection of a debt, and such exemption may not be waived. 

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

9 under this title shall be deemed a payment for purposes 

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

11 1395y). 

12 (e) EXEMPT PROPERTY IN ASBESTOS CLAIMANT’S

13 BANKRUPTCY CASE.—If an asbestos claimant files a peti14 tion for relief under section 301 of title 11, United States 

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

16 as property of the bankruptcy estate of the asbestos claim17 ant in accordance with section 541(b)(6) of title 11, 

18 United States Code. 

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

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

23 be reduced by the amount of collateral source compensa24 tion. 


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

2 under workers’ compensation laws, special adjustments 

3 made under section 131(b)(3), occupational or total dis4 ability benefits under the Railroad Retirement Act (45 

5 U.S.C. 201 et seq.), sickness benefits under the Railroad 

6 Unemployment Insurance Act (45 U.S.C 351 et seq.), and 

7 veterans’ benefits programs be deemed as collateral source 

8 compensation for purposes of this section. 

9 SEC. 135. CERTAIN CLAIMS NOT AFFECTED BY PAYMENT 

10 OF AWARDS. 

11 (a) IN GENERAL.—The payment of an award under 

12 section 106 or 133 shall not be considered a form of com13 pensation or reimbursement for a loss for purposes of im14 posing liability on any asbestos claimant receiving such 

15 payment to repay any— 

16 (1) insurance carrier for insurance payments; 

17 or 

18 (2) person or governmental entity on account of 

19 worker’s compensation, health care, or disability 

20 payments. 

21 (b) NO EFFECT ON CLAIMS.—The payment of an 

22 award to an asbestos claimant under section 106 or 133 

23 shall not affect any claim of an asbestos claimant 

24 against— 


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1 (1) an insurance carrier with respect to insur2 ance; or 

3 (2) against any person or governmental entity 

4 with respect to worker’s compensation, healthcare, 

5 or disability. 

6 TITLE II—ASBESTOS INJURY 

7 CLAIMS RESOLUTION FUND 

8 Subtitle A—Asbestos Defendants 

9 Funding Allocation 

10 SEC. 201. DEFINITIONS. 

11 In this subtitle, the following definitions shall apply: 

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

13 group’’— 

14 (A) means a defendant participant that is 

15 an ultimate parent and any person whose entire 

16 beneficial interest is directly or indirectly owned 

17 by that ultimate parent on the date of enact18 ment of this Act; and 

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

20 debtor or any direct or indirect majority-owned 

21 subsidiary of a debtor. 

22 (2) CLASS ACTION TRUST.—The term ‘‘class ac23 tion trust’’ means a trust or similar entity estab24 lished to hold assets for the payment of asbestos 


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1 claims asserted against a debtor or participating de2 fendant, under a settlement that— 

3 (A) is a settlement of class action claims 

4 under rule 23 of the Federal Rules of Civil Pro5 cedure; and 

6 (B) has been approved by a final judgment 

7 of a United States district court before the date 

8 of enactment of this Act. 

9 (3) DEBTOR.—The term ‘‘debtor’’— 

10 (A) means— 

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

12 pending under a chapter of title 11, United 

13 States Code, on the date of enactment of 

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

15 period immediately preceding that date, ir16 respective of whether the debtor’s case 

17 under that title has been dismissed; and 

18 (ii) all of the direct or indirect major19 ity-owned subsidiaries of a person de20 scribed under clause (i), regardless of 

21 whether any such majority-owned sub22 sidiary has a case pending under title 11, 

23 United States Code; and 

24 (B) shall not include an entity— 


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

2 United States Code, if a final decree clos3 ing the estate shall have been entered be4 fore the date of enactment of this Act; or 

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

6 United States Code, if a plan of reorga7 nization for such entity shall have been 

8 confirmed by a duly entered order or judg9 ment of a court that is no longer subject 

10 to any appeal or judicial review, and the 

11 substantial consummation, as such term is 

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

13 United States Code, of such plan of reor14 ganization has occurred. 

15 (4) INDEMNIFIABLE COST.—The term 

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

17 judgment, or settlement incurred with respect to an 

18 asbestos claim that, at any time before December 

19 31, 2002, was or could have been subject to indem20 nification, contribution, surety, or guaranty. 

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

22 means a person against whom any asbestos claim 

23 has been asserted before December 31, 2002, who 

24 has received from any other person, or on whose be25 half a sum has been paid by such other person to 


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

2 or indemnity in connection with an alleged duty with 

3 respect to the defense or indemnification of such 

4 person concerning that asbestos claim, other than 

5 under a policy of insurance or reinsurance. 

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

7 means a person who has paid under a written agree8 ment at any time before December 31, 2002, a sum 

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

10 on behalf of any person defending against an asbes11 tos claim, in connection with an alleged duty with 

12 respect to the defense or indemnification of such 

13 person concerning that asbestos claim, except that 

14 payments by an insurer or reinsurer under a con15 tract of insurance or reinsurance shall not make the 

16 insurer or reinsurer an indemnitor for purposes of 

17 this subtitle. 

18 (7) PRIOR ASBESTOS EXPENDITURES.—The 

19 term ‘‘prior asbestos expenditures’’— 

20 (A) means the gross total amount paid by 

21 or on behalf of a person at any time before De22 cember 31, 2002, in settlement, judgment, de23 fense, or indemnity costs related to all asbestos 

24 claims against that person; 


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1 (B) includes payments made by insurance 

2 carriers to or for the benefit of such person or 

3 on such person’s behalf with respect to such as4 bestos claims, except as provided in section 

5 204(g); 

6 (C) shall not include any payment made by 

7 a person in connection with or as a result of 

8 changes in insurance reserves required by con9 tract or any activity or dispute related to insur10 ance coverage matters for asbestos-related li11 abilities; and 

12 (D) shall not include any payment made by 

13 or on behalf of persons who are or were com14 mon carriers by railroad for asbestos claims 

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

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

17 Employers’ Liability Act, as a result of oper18 ations as a common carrier by railroad, includ19 ing settlement, judgment, defense, or indemnity 

20 costs associated with these claims. 

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

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

23 524(h) of title 11, United States Code, or estab24 lished in conjunction with an order issued under sec25 tion 105 of title 11, United States Code, established 


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

2 reorganization, which in whole or in part provides 

3 compensation for asbestos claims. 

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

5 parent’’ means a person— 

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

7 the entire beneficial interest, directly or indi8 rectly, of at least 1 other person; and 

9 (B) whose entire beneficial interest was not 

10 owned, on December 31, 2002, directly or indi11 rectly, by any other single person (other than a 

12 natural person). 

13 SEC. 202. AUTHORITY AND TIERS. 

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

15 (1) IN GENERAL.—Defendant participants shall 

16 be liable for payments to the Fund in accordance 

17 with this section based on tiers and subtiers as18 signed to defendant participants. 

19 (2) AGGREGATE PAYMENT OBLIGATIONS

20 LEVEL.—The total payments required of all defend21 ant participants over the life of the Fund shall not 

22 exceed a sum equal to $90,000,000,000 less any 

23 bankruptcy trust credits under section 222(e). The 

24 Administrator shall have the authority to allocate 


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1 the payments required of the defendant participants 

2 among the tiers as provided in this title. 

3 (3) ABILITY TO ENTER REORGANIZATION.— 

4 Notwithstanding any other provision of this Act, all 

5 debtors that, together with all of their direct or indi6 rect majority-owned subsidiaries, have prior asbestos 

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

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

9 reorganization that does not comply with the re10 quirements of this Act, including a trust and chan11 neling injunction under section 524(g) of title 11, 

12 United States Code. Any asbestos claim made in 

13 conjunction with a plan of reorganization allowable 

14 under the preceding sentence shall be subject to sec15 tion 403(d) of this Act. 

16 (b) TIER I.—Tier I shall include all debtors that, to17 gether with all of their direct or indirect majority-owned 

18 subsidiaries, have prior asbestos expenditures greater than 

19 $1,000,000. 

20 (c) TREATMENT OF TIER I BUSINESS ENTITIES IN

21 BANKRUPTCY.— 

22 (1) DEFINITION.— 

23 (A) IN GENERAL.—In this subsection, the 

24 term ‘‘bankrupt business entity’’ means a per25 son that is not a natural person that— 


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1 (i) filed a petition for relief under 

2 chapter 11, of title 11, United States 

3 Code, before January 1, 2003; 

4 (ii) has not substantially con5 summated, as such term is defined under 

6 section 1101(2) of title 11, United States 

7 Code, a plan of reorganization as of the 

8 date of enactment of this Act; and 

9 (iii) the bankruptcy court presiding 

10 over the business entity’s case determines, 

11 after notice and a hearing upon motion 

12 filed by the entity within 30 days after the 

13 date of enactment of this Act, that asbes14 tos liability was not the sole or precipi15 tating cause of the entity’s chapter 11 fil16 ing. 

17 (B) MOTION AND RELATED MATTERS.—A 

18 motion under subparagraph (A)(iii) shall be 

19 supported by— 

20 (i) an affidavit or declaration of the 

21 chief executive officer, chief financial offi22 cer, or chief legal officer of the business 

23 entity; and 

24 (ii) copies of the entity’s public state25 ments and securities filings made in conVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00113 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 nection with the entity’s filing for chapter 

2 11 protection. 

3 Notice of such motion shall be as directed by 

4 the bankruptcy court, and the hearing shall be 

5 limited to consideration of the question of 

6 whether or not asbestos liability was the sole or 

7 precipitating cause of the entity’s chapter 11 

8 filing. The bankruptcy court shall hold a hear9 ing and make its determination with respect to 

10 the motion within 60 days after the date the 

11 motion is filed. In making its determination, 

12 the bankruptcy court shall take into account 

13 the affidavits, public statements, and securities 

14 filings, and other information, if any, submitted 

15 by the entity and all other facts and cir16 cumstances presented by an objecting party. 

17 Any review of this determination shall be an ex18 pedited appeal and limited to whether the deci19 sion was against the weight of the evidence. 

20 Any appeal of a determination shall be an expe21 dited review to the United States Circuit Court 

22 of Appeals for the circuit in which the bank23 ruptcy is filed. 

24 (2) PROCEEDING WITH REORGANIZATION

25 PLAN.—A bankrupt business entity may proceed 


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1 with the filing, solicitation, confirmation, and con2 summation of a plan of reorganization that does not 

3 comply with the requirements of this Act, including 

4 a trust and channeling injunction described in sec5 tion 524(g) of title 11, United States Code, notwith6 standing any other provisions of this Act, if the 

7 bankruptcy court makes a favorable determination 

8 under paragraph (1)(B), unless the bankruptcy 

9 court’s determination is overruled on appeal and all 

10 appeals are final. Such a bankrupt business entity 

11 may continue to so proceed, if— 

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

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

14 a hearing, the bankruptcy court presiding over 

15 the chapter 11 case of the bankrupt business 

16 entity determines that— 

17 (i) confirmation is necessary to permit 

18 the reorganization of that entity and as19 sure that all creditors and that entity are 

20 treated fairly and equitably; and 

21 (ii) confirmation is clearly favored by 

22 the balance of the equities; and 

23 (B) an order confirming the plan of reor24 ganization is entered by the bankruptcy court 

25 within 9 months after the date of enactment of 


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1 this Act or such longer period of time approved 

2 by the bankruptcy court for cause shown. 

3 (3) APPLICABILITY.—If the bankruptcy court 

4 does not make the determination required under 

5 paragraph (2), or if an order confirming the plan is 

6 not entered within 9 months after the date of enact7 ment of this Act or such longer period of time ap8 proved by the bankruptcy court for cause shown, the 

9 provisions of this Act shall apply to the bankrupt 

10 business entity notwithstanding the certification. 

11 Any timely appeal under title 11, United States 

12 Code, from a confirmation order entered during the 

13 applicable time period shall automatically extend the 

14 time during which this Act is inapplicable to the 

15 bankrupt business entity, until the appeal is fully 

16 and finally resolved. 

17 (4) OFFSETS.— 

18 (A) PAYMENTS BY INSURERS.—To the ex19 tent that a bankrupt business entity or debtor 

20 successfully confirms a plan of reorganization, 

21 including a trust, and channeling injunction 

22 that involves payments by insurers who are oth23 erwise subject to this Act as described under 

24 section 524(g) of title 11, United States Code, 

25 an insurer who makes payments to the trust 


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1 shall obtain a dollar-for-dollar reduction in the 

2 amount otherwise payable by that insurer under 

3 this Act to the Fund. 

4 (B) CONTRIBUTIONS TO FUND.—Any cash 

5 payments by a bankrupt business entity, if any, 

6 to a trust described under section 524(g) of 

7 title 11, United States Code, may be counted as 

8 a contribution to the Fund. 

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

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

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

12 VI, according to the prior asbestos expenditures paid by 

13 such persons or affiliated groups as follows: 

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

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

16 than $75,000,000. 

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

18 than $50,000,000. 

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

20 $10,000,000. 

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

22 than $5,000,000. 

23 (e) TIER PLACEMENT AND COSTS.— 

24 (1) PERMANENT TIER PLACEMENT.—After a 

25 defendant participant or affiliated group is assigned 


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

2 participant or affiliated group shall remain in that 

3 tier and subtier throughout the life of the Fund, re4 gardless of subsequent events, including— 

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

6 of title 11, United States Code; 

7 (B) a discharge of debt in bankruptcy; 

8 (C) the confirmation of a plan of reorga9 nization; or 

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

11 other person or affiliated group, unless the Ad12 ministrator finds that the information sub13 mitted by the participant or affiliated group to 

14 support its inclusion in that tier was inaccurate. 

15 (2) COSTS.—Payments to the Fund by all per16 sons that are the subject of a case under a chapter 

17 of title 11, United States Code, after the date of en18 actment of this Act— 

19 (A) shall constitute costs and expenses of 

20 administration of the case under section 503 of 

21 title 11, United States Code, and shall be pay22 able in accordance with the payment provisions 

23 under this subtitle notwithstanding the pend24 ency of the case under that title 11; 


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

2 enforcement or collection by any stay or injunc3 tion power of any court; and 

4 (C) shall not be impaired or discharged in 

5 any current or future case under title 11, 

6 United States Code. 

7 (f) SUPERSEDING PROVISIONS.— 

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

9 superseded in their entireties by this Act: 

10 (A) The treatment of any asbestos claim in 

11 any plan of reorganization with respect to any 

12 debtor included in Tier I. 

13 (B) Any asbestos claim against any debtor 

14 included in Tier I. 

15 (C) Any agreement, understanding, or un16 dertaking by any such debtor or any third party 

17 with respect to the treatment of any asbestos 

18 claim filed in a debtor’s bankruptcy case or 

19 with respect to a debtor before the date of en20 actment of this Act, whenever such debtor’s 

21 case is either still pending, if such case is pend22 ing under a chapter other than chapter 11 of 

23 title 11, United States Code, or subject to con24 firmation or substantial consummation of a 


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1 plan of reorganization under chapter 11 of title 

2 11, United States Code. 

3 (2) PRIOR AGREEMENTS OF NO EFFECT.—Not4 withstanding section 403(c)(3), any plan of reorga5 nization, agreement, understanding, or undertaking 

6 by any debtor (including any pre-petition agreement, 

7 understanding, or undertaking that requires future 

8 performance) or any third party under paragraph 

9 (1), and any agreement, understanding, or under10 taking entered into in anticipation, contemplation, or 

11 furtherance of a plan of reorganization, to the extent 

12 it relates to any asbestos claim, shall be of no force 

13 or effect, and no person shall have any right or 

14 claim with respect to any such agreement, under15 standing, or undertaking. 

16 SEC. 203. SUBTIERS. 

17 (a) IN GENERAL.— 

18 (1) SUBTIER LIABILITY.—Except as otherwise 

19 provided under subsections (b), (d), and (l) of sec20 tion 204, persons or affiliated groups shall be in21 cluded within Tiers I through VII and shall pay 

22 amounts to the Fund in accordance with this sec23 tion. 

24 (2) REVENUES.— 


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

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

5 reported as revenues in the annual report filed 

6 with the Securities and Exchange Commission 

7 in accordance with the Securities Exchange Act 

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

9 recent fiscal year ending on or before December 

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

13 be the amount that the defendant participant or 

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

17 been required to file. 

18 (B) INSURANCE PREMIUMS.—Any portion 

19 of revenues of a defendant participant that is 

20 derived from insurance premiums shall not be 

21 used to calculate the payment obligation of that 

22 defendant participant under this subtitle. 

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

24 shall include the revenues of the debtor and all 

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1 aries of that debtor, except that the pro forma 

2 revenues of a person that is included in Subtier 

3 2 of Tier I shall not be included in calculating 

4 the revenues of any debtor that is a direct or 

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

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

10 revenues of such debtor or affiliated group— 

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

13 claims the class action trust was estab14 lished; and 

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

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

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

22 such debtor and affiliated group. 

23 (b) TIER I SUBTIERS.— 


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

2 be included in subtiers and shall pay amounts to the 

3 Fund as provided under this section. 

4 (2) SUBTIER 1.— 

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

6 debtors with prior asbestos expenditures of 

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

8 Subtier 1. 

9 (B) PAYMENT.—Each debtor included in 

10 Subtier 1 shall pay on an annual basis 1.67024 

11 percent of the debtor’s 2002 revenues. 

12 (C) OTHER ASSETS.—The Administrator, 

13 at the sole discretion of the Administrator, may 

14 allow a Subtier 1 debtor to satisfy its funding 

15 obligation under this paragraph with assets 

16 other than cash if the Administrator determines 

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

20 (D) LIABILITY.— 

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

22 subject to a case pending under a chapter 

23 of title 11, United States Code, as defined 

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

25 due any payment obligation for the debtor, 


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1 the Administrator shall have the right to 

2 seek payment of all or any portion of the 

3 entire amount due (as well as any other 

4 amount for which the debtor may be liable 

5 under sections 223 and 224) from any of 

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

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

10 preclude actions among persons within a 

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

12 with respect to the payment obligations 

13 under this Act. 

14 (iii) RIGHT OF CONTRIBUTION.— 

15 (I) IN GENERAL.—Notwith16 standing any other provision of this 

17 Act, if a direct or indirect majority18 owned foreign subsidiary of a debtor 

19 participant (with such relationship to 

20 the debtor participant as determined 

21 on the date of enactment of this Act) 

22 is or becomes subject to any foreign 

23 insolvency proceedings, and such for24 eign direct or indirect-majority owned 

25 subsidiary is liquidated in connection 


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1 with such foreign insolvency pro2 ceedings (or if the debtor participant’s 

3 interest in such foreign subsidiary is 

4 otherwise canceled or terminated in 

5 connection with such foreign insol6 vency proceedings), the debtor partici7 pant shall have a claim against such 

8 foreign subsidiary or the estate of 

9 such foreign subsidiary in an amount 

10 equal to the greater of— 

11 (aa) the estimated amount 

12 of all current and future asbestos 

13 liabilities against such foreign 

14 subsidiary; or 

15 (bb) the foreign subsidiary’s 

16 allocable share of the debtor par17 ticipant’s funding obligations to 

18 the Fund as determined by such 

19 foreign subsidiary’s allocable 

20 share of the debtor participant’s 

21 2002 gross revenue. 

22 (II) DETERMINATION OF CLAIM

23 AMOUNT.—The claim amount under 

24 subclause (I) (aa) or (bb) shall be deVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00125 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 termined by a court of competent ju2 risdiction in the United States. 

3 (III) EFFECT ON PAYMENT OBLI4 GATION.—The right to, or recovery 

5 under, any such claim shall not re6 duce, limit, delay, or otherwise affect 

7 the debtor participant’s payment obli8 gations under this Act. 

9 (iv) MAXIMUM ANNUAL PAYMENT OB10 LIGATION.—Subject to any payments 

11 under sections 204(l) and 222(d), and 

12 paragraphs (3), (4), and (5) of this sub13 section, the annual payment obligation by 

14 a debtor under subparagraph (B) of this 

15 paragraph shall not exceed $80,000,000. 

16 (3) SUBTIER 2.— 

17 (A) IN GENERAL.—Notwithstanding para18 graph (2), all persons that are debtors that 

19 have no material continuing business operations 

20 but hold cash or other assets that have been al21 located or earmarked for the settlement of as22 bestos claims shall be included in Subtier 2. 

23 (B) ASSIGNMENT OF ASSETS.—Not later 

24 than 90 days after the date of enactment of 


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1 this Act, each person included in Subtier 2 shall 

2 assign all of its assets to the Fund. 

3 (4) SUBTIER 3.— 

4 (A) IN GENERAL.—Notwithstanding para5 graph (2), all persons that are debtors other 

6 than those included in Subtier 2, which have no 

7 material continuing business operations and no 

8 cash or other assets allocated or earmarked for 

9 the settlement of any asbestos claim, shall be 

10 included in Subtier 3. 

11 (B) ASSIGNMENT OF UNENCUMBERED AS12 SETS.—Not later than 90 days after the date of 

13 enactment of this Act, each person included in 

14 Subtier 3 shall contribute an amount equal to 

15 50 percent of its total unencumbered assets. 

16 (C) CALCULATION OF UNENCUMBERED AS17 SETS.—Unencumbered assets shall be cal18 culated as the Subtier 3 person’s total assets, 

19 excluding insurance-related assets, less— 

20 (i) all allowable administrative ex21 penses; 

22 (ii) allowable priority claims under 

23 section 507 of title 11, United States 

24 Code; and 

25 (iii) allowable secured claims. 


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

2 class action trust that has been established in re3 spect of the liabilities for asbestos claims of any per4 son included within a debtor and affiliated group 

5 that has been included in Tier I (exclusive of any as6 sets needed to pay previously incurred expenses and 

7 asbestos claims within the meaning of section 

8 403(d)(1), before the date of enactment of this Act) 

9 shall be transferred to the Fund not later than 6 

10 months after the date of enactment of this Act. 

11 (c) TIER II SUBTIERS.— 

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

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

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

17 and affiliated groups as possible, with— 

18 (A) those persons or affiliated groups with 

19 the highest revenues included in Subtier 1; 

20 (B) those persons or affiliated groups with 

21 the next highest revenues included in Subtier 2; 

22 (C) those persons or affiliated groups with 

23 the lowest revenues included in Subtier 5; 


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1 (D) those persons or affiliated groups with 

2 the next lowest revenues included in Subtier 4; 

3 and 

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

6 (2) PAYMENTS.—Each person or affiliated 

7 group within each subtier shall pay, on an annual 

8 basis, the following: 

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

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

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

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

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

14 (d) TIER III SUBTIERS.— 

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

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

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

20 and affiliated groups as possible, with— 

21 (A) those persons or affiliated groups with 

22 the highest revenues included in Subtier 1; 

23 (B) those persons or affiliated groups with 

24 the next highest revenues included in Subtier 2; 


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1 (C) those persons or affiliated groups with 

2 the lowest revenues included in Subtier 5; 

3 (D) those persons or affiliated groups with 

4 the next lowest revenues included in Subtier 4; 

5 and 

6 (E) those persons or affiliated groups re7 maining included in Subtier 3. 

8 (2) PAYMENTS.—Each person or affiliated 

9 group within each subtier shall pay, on an annual 

10 basis, the following: 

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

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

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

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

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

16 (e) TIER IV SUBTIERS.— 

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

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

19 subtiers of Tier IV, 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 4. Those persons or affiliated groups with the highVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00130 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 est revenues among those remaining will be included 

2 in Subtier 2 and the rest in Subtier 3. 

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

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

5 the following: 

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

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

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

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

10 (f) TIER V SUBTIERS.— 

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

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

13 subtiers of Tier V, based on the person’s or affili14 ated group’s revenues. Such subtiers shall each con15 tain as close to an equal number of total persons 

16 and affiliated groups as possible, with those persons 

17 or affiliated groups with the highest revenues in 

18 Subtier 1, those with the lowest revenues in Subtier 

19 3, and those remaining in Subtier 2. 

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

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

22 the following: 

23 (A) Subtier 1: $1,000,000. 

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

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


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1 (g) TIER VI SUBTIERS.— 

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

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

4 subtiers of Tier VI, based on the person’s or affili5 ated group’s revenues. Such subtiers shall each con6 tain as close to an equal number of total persons 

7 and affiliated groups as possible, with those persons 

8 or affiliated groups with the highest revenues in 

9 Subtier 1, those with the lowest revenues in Subtier 

10 3, and those remaining in Subtier 2. 

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

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

13 the following: 

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

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

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

17 (h) TIER VII.— 

18 (1) IN GENERAL.—Notwithstanding prior as19 bestos expenditures that might qualify a person or 

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

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

22 included in Tier VII, if the person or affiliated 

23 group— 

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

25 asbestos claims brought under the Act of April 


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1 22, 1908 (45 U.S.C. 51 et seq.), commonly 

2 known as the Employers’ Liability Act, as a re3 sult of operations as a common carrier by rail4 road; and 

5 (B) has paid (including any payments 

6 made by others on behalf of such person or af7 filiated group) not less than $5,000,000 in set8 tlement, judgment, defense, or indemnity costs 

9 relating to such claims. 

10 (2) ADDITIONAL AMOUNT.—The payment re11 quirement for persons or affiliated groups included 

12 in Tier VII shall be in addition to any payment re13 quirement applicable to such person or affiliated 

14 group under Tiers II through VI. 

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

16 group in Tier VII with revenues of $6,000,000,000 

17 or more is included in Subtier 1 and shall make an18 nual payments of $11,000,000 to the Fund. 

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

20 group in Tier VII with revenues of less than 

21 $6,000,000,000, but not less than $4,000,000,000 is 

22 included in Subtier 2 and shall make annual pay23 ments of $5,500,000 to the Fund. 

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

25 group in Tier VII with revenues of less than 


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1 $4,000,000,000, but not less than $500,000,000 is 

2 included in Subtier 3 and shall make annual pay3 ments of $550,000 to the Fund. 

4 (6) JOINT VENTURE REVENUES AND LIABIL5 ITY.— 

6 (A) REVENUES.—For purposes of this sub7 section, the revenues of a joint venture shall be 

8 included on a pro rata basis reflecting relative 

9 joint ownership to calculate the revenues of the 

10 parents of that joint venture. The joint venture 

11 shall not be responsible for a contribution 

12 amount under this subsection. 

13 (B) LIABILITY.—For purposes of this sub14 section, the liability under the Act of April 22, 

15 1908 (45 U.S.C. 51 et seq.), commonly known 

16 as the Employers’ Liability Act, shall be attrib17 uted to the parent owners of the joint venture 

18 on a pro rata basis, reflecting their relative 

19 share of ownership. The joint venture shall not 

20 be responsible for a payment amount under this 

21 provision. 

22 SEC. 204. ASSESSMENT ADMINISTRATION. 

23 (a) IN GENERAL.—Each defendant participant or af24 filiated group shall pay to the Fund in the amounts proVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00134 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 vided under this subtitle as appropriate for its tier and 

2 subtier each year until the earlier to occur of the following: 

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

5 30 annual payment cycles of the operation of the 

6 Fund. 

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

9 to defendant participants under subsection (d), 

10 equals the maximum aggregate payment obligation 

11 of section 202(a)(2). 

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

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

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

17 payment requirement under this subtitle and shall not be 

18 included in the subtier allocations under section 203. 

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

24 (d) ADJUSTMENTS.— 


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1 (1) IN GENERAL.—Under expedited procedures 

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

5 or demonstrated inequity. The Administrator may 

6 determine whether to grant an adjustment and the 

7 size of any such adjustment, in accordance with this 

8 subsection. A defendant participant has a right to 

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

12 adjust a defendant participant’s payment obligations 

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

15 obligation or by providing relevant rebates from the 

16 defendant hardship and inequity adjustment account 

17 created under subsection (j) after payment of the 

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

20 (2) FINANCIAL HARDSHIP ADJUSTMENTS.— 

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

24 in which a payment obligation to the Fund re25 mains outstanding and may qualify for such adVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00136 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 justment by demonstrating that the amount of 

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

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

7 inequity adjustment account established under 

8 subsection (j), a financial hardship adjustment 

9 under this subsection shall have a term of 3 

10 years. 

11 (C) RENEWAL.—After an initial hardship 

12 adjustment is granted under this paragraph, a 

13 defendant participant may renew its hardship 

14 adjustment by demonstrating that it remains 

15 justified. 

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

19 funding period prescribed under subsection (a), 

20 the Administrator shall annually determine 

21 whether there has been a material change in 

22 the financial condition of the defendant partici23 pant such that the Administrator may, con24 sistent with the policies and legislative intent 

25 underlying this Act, reinstate under terms and 


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1 conditions established by the Administrator any 

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

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

6 (3) INEQUITY ADJUSTMENTS.— 

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

9 (i) may qualify for an adjustment 

10 based on inequity by demonstrating that 

11 the amount of its payment obligation 

12 under the statutory allocation is exception13 ally inequitable— 

14 (I) when measured against the 

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

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

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

21 participants in the same tier; or 

22 (III) when measured against the 

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

25 incurred with respect to claims that 


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1 neither resulted in an adverse judg2 ment against the defendant, nor were 

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

5 on behalf of that defendant; 

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

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

11 such person’s prior asbestos expenditures 

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

14 related products, so long as such person’s 

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

17 and causally remote, and for purposes of 

18 this clause, a person’s manufacture and 

19 sale of railroad locomotives and related 

20 products shall be deemed to be temporally 

21 and causally remote if the asbestos claims 

22 historically and generally filed against such 

23 person relate to the manufacture and sale 

24 of railroad locomotives and related prod25 ucts by an entity dissolved more than 25 


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1 years before the date of enactment of this 

2 Act; and 

3 (iii) shall be granted a two-tier adjust4 ment reducing the defendant participant’s 

5 payment obligation based on inequity by 

6 demonstrating that not less than 95 per7 cent of such participant’s prior asbestos 

8 expenditures arose from asbestos claims 

9 based on successor liability arising from a 

10 merger to which the participant or its 

11 predecessor was a party that occurred at 

12 least 30 years before the date of enactment 

13 of this Act, and that such prior asbestos 

14 expenditures exceed the inflation-adjusted 

15 value of the assets of the company from 

16 which such liability was derived in such 

17 merger, and upon such demonstration the 

18 Administrator shall grant such adjustment 

19 for the life of the Fund and amounts paid 

20 by such defendant participant prior to such 

21 adjustment in excess of its adjusted pay22 ment obligation under this clause shall be 

23 credited against next succeeding required 

24 payment obligations. 


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1 (B) PAYMENT RATE.—For purposes of 

2 subparagraph (A), the payment rate of a de3 fendant participant is the payment amount of 

4 the defendant participant as a percentage of 

5 such defendant participant’s gross revenues for 

6 the year ending December 31, 2002. 

7 (C) TERM.—Subject to the annual avail8 ability of funds in the defendant hardship and 

9 inequity adjustment account established under 

10 subsection (j), an inequity adjustment under 

11 this subsection shall have a term of 3 years. 

12 (D) RENEWAL.—A defendant participant 

13 may renew an inequity adjustment every 3 

14 years by demonstrating that the adjustment re15 mains justified. 

16 (E) REINSTATEMENT.— 

17 (i) IN GENERAL.—Following the ter18 mination of an inequity adjustment under 

19 subparagraph (A), and during the funding 

20 period prescribed under subsection (a), the 

21 Administrator shall annually determine 

22 whether there has been a material change 

23 in conditions which would support a find24 ing that the amount of the defendant par25 ticipant’s payment under the statutory alVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00141 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 location was not inequitable. Based on this 

2 determination, the Administrator may, 

3 consistent with the policies and legislative 

4 intent underlying this Act, reinstate any or 

5 all of the payment obligations of the de6 fendant participant as if the inequity ad7 justment had not been granted for that 3- 

8 year period. 

9 (ii) TERMS AND CONDITIONS.—In the 

10 event of a reinstatement under clause (i), 

11 the Administrator may require the defend12 ant participant to pay any part or all of 

13 amounts not paid due to the inequity ad14 justment on such terms and conditions as 

15 established by the Administrator. 

16 (4) LIMITATION ON ADJUSTMENTS.—The ag17 gregate total of financial hardship adjustments 

18 under paragraph (2) and inequity adjustments under 

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

20 exceed $300,000,000, except to the extent additional 

21 monies are available for such adjustments as a re22 sult of carryover of prior years’ funds under sub23 section (j)(3) or as a result of monies being made 

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

25 (5) ADVISORY PANELS.— 


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1 (A) APPOINTMENT.—The Administrator 

2 shall appoint a Financial Hardship Adjustment 

3 Panel and an Inequity Adjustment Panel to ad4 vise the Administrator in carrying out this sub5 section. 

6 (B) MEMBERSHIP.—The membership of 

7 the panels appointed under subparagraph (A) 

8 may overlap. 

9 (C) COORDINATION.—The panels ap10 pointed under subparagraph (A) shall coordi11 nate their deliberations and advice. 

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

13 defendant participant to pay to the Fund shall be limited 

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

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

16 defendant participant shall have any liability for the pay17 ment obligations of any other defendant participant. 

18 (f) CONSOLIDATION OF PAYMENTS.— 

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

20 the payment levels of defendant participants, any af21 filiated group including 1 or more defendant partici22 pants may irrevocably elect, as part of the submis23 sions to be made under paragraphs (1) and (3) of 

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

25 of the information necessary to determine the payVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00143 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 ment level under this subtitle and pay to the Fund 

2 on a consolidated basis. 

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

4 consolidation as provided in this subsection— 

5 (A) for purposes of this Act other than 

6 this subsection, the affiliated group shall be 

7 treated as if it were a single participant, includ8 ing with respect to the assessment of a single 

9 annual payment under this subtitle for the en10 tire affiliated group; 

11 (B) the ultimate parent of the affiliated 

12 group shall prepare and submit each submission 

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

14 entire affiliated group and shall be solely liable, 

15 as between the Administrator and the affiliated 

16 group only, for the payment of the annual 

17 amount due from the affiliated group under this 

18 subtitle, except that, if the ultimate parent does 

19 not pay when due any payment obligation for 

20 the affiliated group, the Administrator shall 

21 have the right to seek payment of all or any 

22 portion of the entire amount due (as well as 

23 any other amount for which the affiliated group 

24 may be liable under sections 223 and 224) from 

25 any member of the affiliated group; 


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1 (C) all members of the affiliated group 

2 shall be identified in the submission under sub3 section (i) and shall certify compliance with this 

4 subsection and the Administrator’s regulations 

5 implementing this subsection; and 

6 (D) the obligations under this subtitle shall 

7 not change even if, after the date of enactment 

8 of this Act, the beneficial ownership interest be9 tween any members of the affiliated group shall 

10 change. 

11 (3) CAUSE OF ACTION.—Notwithstanding sec12 tion 221(e), this Act shall not preclude actions 

13 among persons within an affiliated group with re14 spect to the payment obligations under this Act. 

15 (g) DETERMINATION OF PRIOR ASBESTOS EXPENDI16 TURES.— 

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

18 a defendant participant’s prior asbestos expendi19 tures, the Administrator shall prescribe such rules 

20 as may be necessary or appropriate to assure that 

21 payments by indemnitors before December 31, 2002, 

22 shall be counted as part of the indemnitor’s prior as23 bestos expenditures, rather than the indemnitee’s 

24 prior asbestos expenditures, in accordance with this 

25 subsection. 


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1 (2) INDEMNIFIABLE COSTS.—If an indemnitor 

2 has paid or reimbursed to an indemnitee any 

3 indemnifiable cost or otherwise made a payment on 

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

5 third party for an indemnifiable cost before Decem6 ber 31, 2002, the amount of such indemnifiable cost 

7 shall be solely for the account of the indemnitor for 

8 purposes under this Act. 

9 (3) INSURANCE PAYMENTS.—When computing 

10 the prior asbestos expenditures with respect to an 

11 asbestos claim, any amount paid or reimbursed by 

12 insurance shall be solely for the account of the 

13 indemnitor, even if the indemnitor would have no di14 rect right to the benefit of the insurance, if— 

15 (A) such insurance has been paid or reim16 bursed to the indemnitor or the indemnitee, or 

17 paid on behalf of or for the benefit of the 

18 indemnitee; and 

19 (B) the indemnitor has either, with respect 

20 to such asbestos claim or any similar asbestos 

21 claim, paid or reimbursed to its indemnitee any 

22 indemnifiable cost or paid to any third party on 

23 behalf of or for the benefit of the indemnitee 

24 any indemnifiable cost. 


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1 (4) TREATMENT OF CERTAIN EXPENDI2 TURES.—Notwithstanding any other provision of 

3 this Act, where— 

4 (A) an indemnitor entered into a stock 

5 purchase agreement in 1988 that involved the 

6 sale of the stock of businesses that produced 

7 friction and other products; and 

8 (B) the stock purchase agreement provided 

9 that the indemnitor indemnified the indemnitee 

10 and its affiliates for losses arising from various 

11 matters, including asbestos claims— 

12 (i) asserted before the date of the 

13 agreement; and 

14 (ii) filed after the date of the agree15 ment and prior to the 10-year anniversary 

16 of the stock sale, 

17 then the prior asbestos expenditures arising from the 

18 asbestos claims described in clauses (i) and (ii) shall 

19 not be for the account of either the indemnitor or 

20 indemnitee. 

21 (h) MINIMUM ANNUAL PAYMENTS.— 

22 (1) IN GENERAL.—The aggregate annual pay23 ments of defendant participants to the Fund shall be 

24 at least $3,000,000,000 for each calendar year in 

25 the first 30 years of the Fund, or until such shorter 


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1 time as the condition set forth in subsection (a)(2) 

2 is attained. 

3 (2) GUARANTEED PAYMENT ACCOUNT.—To the 

4 extent payments in accordance with sections 202 

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

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

7 $3,000,000,000 net of any adjustments under sub8 section (d), the balance needed to meet this required 

9 minimum aggregate annual payment shall be ob10 tained from the defendant guaranteed payment ac11 count established under subsection (k). 

12 (3) GUARANTEED PAYMENT SURCHARGE.—To 

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

14 is insufficient to satisfy the required minimum ag15 gregate annual payment net of any adjustments 

16 under subsection (d), the Administrator may assess 

17 a guaranteed payment surcharge under subsection 

18 (l). 

19 (i) PROCEDURES FOR MAKING PAYMENTS.— 

20 (1) INITIAL YEAR: TIERS II–VI.— 

21 (A) IN GENERAL.—Not later than 120 

22 days after enactment of this Act, each defend23 ant participant that is included in Tiers II, III, 

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


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1 (i) a statement of whether the defend2 ant participant irrevocably elects to report 

3 on a consolidated basis under subsection 

4 (f); 

5 (ii) a good-faith estimate of its prior 

6 asbestos expenditures; 

7 (iii) a statement of its 2002 revenues, 

8 determined in accordance with section 

9 203(a)(2); and 

10 (iv) payment in the amount specified 

11 in section 203 for the lowest subtier of the 

12 tier within which the defendant participant 

13 falls, except that if the defendant partici14 pant, or the affiliated group including the 

15 defendant participant, had 2002 revenues 

16 exceeding $3,000,000,000, it or its affili17 ated group shall pay the amount specified 

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

19 Subtier 2 of Tiers V or VI, depending on 

20 the applicable Tier. 

21 (B) RELIEF.— 

22 (i) IN GENERAL.—The Administrator 

23 shall establish procedures to grant a de24 fendant participant relief from its initial 


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1 payment obligation if the participant shows 

2 that— 

3 (I) the participant is likely to 

4 qualify for a financial hardship ad5 justment; and 

6 (II) failure to provide interim re7 lief would cause severe irreparable 

8 harm. 

9 (ii) JUDICIAL RELIEF.—The Adminis10 trator’s refusal to grant relief under clause 

11 (i) is subject to immediate judicial review 

12 under section 303. 

13 (2) INITIAL YEAR: TIER I.—Not later than 60 

14 days after enactment of this Act, each debtor shall 

15 file with the Administrator— 

16 (A) a statement identifying the bankruptcy 

17 case(s) associated with the debtor; 

18 (B) a statement whether its prior asbestos 

19 expenditures exceed $1,000,000; 

20 (C) a statement whether it has material 

21 continuing business operations and, if not, 

22 whether it holds cash or other assets that have 

23 been allocated or earmarked for asbestos settle24 ments; 


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1 (D) in the case of debtors falling within 

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

3 2002 revenues, determined in accordance with 

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

5 203(b)(2)(B); 

6 (E) in the case of debtors falling within 

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

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

9 (F) in the case of debtors falling within 

10 Subtier 3 of Tier I, a payment under section 

11 203(b)(4)(B), and a statement of how such 

12 payment was calculated. 

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

14 days after enactment of this Act, each defendant 

15 participant in Tier VII shall file with the Adminis16 trator— 

17 (A) a good-faith estimate of all payments 

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

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

20 (B) a statement of revenues calculated in 

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

22 and 

23 (C) payment in the amount specified in 

24 section 203(h). 


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

2 240 days after enactment of this Act, the Adminis3 trator shall— 

4 (A) directly notify all reasonably identifi5 able defendant participants of the requirement 

6 to submit information necessary to calculate the 

7 amount of any required payment to the Fund; 

8 and 

9 (B) publish in the Federal Register a no10 tice— 

11 (i) setting forth the criteria in this 

12 Act, and as prescribed by the Adminis13 trator in accordance with this Act, for pay14 ing under this subtitle as a defendant par15 ticipant and requiring any person who may 

16 be a defendant participant to submit such 

17 information; and 

18 (ii) that includes a list of all defend19 ant participants notified by the Adminis20 trator under subparagraph (A), and pro21 vides for 30 days for the submission by the 

22 public of comments or information regard23 ing the completeness and accuracy of the 

24 list of identified defendant participants. 

25 (5) RESPONSE REQUIRED.— 


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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 AdVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00153 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 ministrator’s audit authority under section 

2 221(d). 

3 (6) NOTICE OF INITIAL DETERMINATION.— 

4 (A) IN GENERAL.— 

5 (i) NOTICE TO INDIVIDUAL.—Not 

6 later than 60 days after receiving a re7 sponse under paragraph (5), the Adminis8 trator shall send the person a notice of ini9 tial determination identifying the tier and 

10 subtier, if any, into which the person falls 

11 and the annual payment obligation, if any, 

12 to the Fund, which determination shall be 

13 based on the information received from the 

14 person under this subsection and any other 

15 pertinent information available to the Ad16 ministrator and identified to the defendant 

17 participant. 

18 (ii) PUBLIC NOTICE.—Not later than 

19 7 days after sending the notification of ini20 tial determination to defendant partici21 pants, the Administrator shall publish in 

22 the Federal Register a notice listing the 

23 defendant participants that have been sent 

24 such notification, and the initial deter25 mination identifying the tier and subtier 


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1 assignment and annual payment obligation 

2 of each identified participant. 

3 (B) NO RESPONSE; INCOMPLETE RE4 SPONSE.—If no response in accordance with 

5 paragraph (5) is received from a defendant par6 ticipant, or if the response is incomplete, the 

7 initial determination shall be based on the best 

8 information available to the Administrator. 

9 (C) PAYMENTS.—Within 30 days of receiv10 ing a notice of initial determination requiring 

11 payment, the defendant participant shall pay 

12 the Administrator the amount required by the 

13 notice, after deducting any previous payment 

14 made by the participant under this subsection. 

15 If the amount that the defendant participant is 

16 required to pay is less than any previous pay17 ment made by the participant under this sub18 section, the Administrator shall credit any ex19 cess payment against the future payment obli20 gations of that defendant participant. The 

21 pendency of a petition for rehearing under 

22 paragraph (10) shall not stay the obligation of 

23 the participant to make the payment specified 

24 in the Administrator’s notice. 


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1 (7) EXEMPTIONS FOR INFORMATION RE2 QUIRED.— 

3 (A) PRIOR ASBESTOS EXPENDITURES.—In 

4 lieu of submitting information related to prior 

5 asbestos expenditures as may be required for 

6 purposes of this subtitle, a non-debtor defend7 ant participant may consent to be assigned to 

8 Tier II. 

9 (B) REVENUES.—In lieu of submitting in10 formation related to revenues as may be re11 quired for purposes of this subtitle, a non-debt12 or defendant participant may consent to be as13 signed to Subtier 1 of the defendant partici14 pant’s applicable tier. 

15 (8) NEW INFORMATION.— 

16 (A) EXISTING PARTICIPANT.—The Admin17 istrator shall adopt procedures for requiring ad18 ditional payment, or refunding amounts already 

19 paid, based on new information received. 

20 (B) ADDITIONAL PARTICIPANT.—If the 

21 Administrator, at any time, receives information 

22 that an additional person may qualify as a de23 fendant participant, the Administrator shall re24 quire such person to submit information nec25 essary to determine whether that person is reVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00156 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 quired to make payments, and in what amount, 

2 under this subtitle and shall make any deter3 mination or take any other act consistent with 

4 this Act based on such information or any other 

5 information available to the Administrator with 

6 respect to such person. 

7 (9) SUBPOENAS.—The Administrator may re8 quest the Attorney General to subpoena persons to 

9 compel testimony, records, and other information 

10 relevant to its responsibilities under this section. The 

11 Attorney General may enforce such subpoena in ap12 propriate proceedings in the United States district 

13 court for the district in which the person to whom 

14 the subpoena was addressed resides, was served, or 

15 transacts business. 

16 (10) REHEARING.—A defendant participant has 

17 a right to obtain rehearing of the Administrator’s 

18 determination under this subsection of the applicable 

19 tier or subtier and of the Administrator’s determina20 tion under subsection (d) of a financial hardship or 

21 inequity adjustment, if the request for rehearing is 

22 filed within 30 days after the defendant participant’s 

23 receipt of notice from the Administrator of the de24 termination. A defendant participant may not file an 

25 action under section 303 unless the defendant parVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00157 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 ticipant requests a rehearing under this paragraph. 

2 The Administrator shall publish a notice in the Fed3 eral Register of any change in a defendant partici4 pant’s tier or subtier assignment or payment obliga5 tion as a result of a rehearing. 

6 (j) DEFENDANT HARDSHIP AND INEQUITY ADJUST7 MENT ACCOUNT.— 

8 (1) IN GENERAL.—To the extent the total pay9 ments by defendant participants in any given year 

10 exceed the minimum aggregate annual payments 

11 under subsection (h), excess monies up to a max12 imum of $300,000,000 in any such year shall be 

13 placed in a defendant hardship and inequity adjust14 ment account established within the Fund by the 

15 Administrator. 

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

17 the defendant hardship and inequity adjustment ac18 count shall be preserved and administered like the 

19 remainder of the Fund, but shall be reserved and 

20 may be used only— 

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

22 defendant participant for severe financial hard23 ship or demonstrated inequity under subsection 

24 (d) or to reimburse any defendant participant 


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1 granted such relief after its payment of the 

2 amount otherwise due; and 

3 (B) if the condition set forth in subsection 

4 (a)(2) is met, for any purpose that the Fund 

5 may serve under this Act. 

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

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

8 use all of the funds allocated to the account under 

9 paragraph (1) for adjustments granted under sub10 section (d), remaining funds in the account shall be 

11 carried forward for use by the Administrator for ad12 justments in subsequent years. 

13 (k) DEFENDANT GUARANTEED PAYMENT AC14 COUNT.— 

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

16 and (j), if there are excess monies paid by defendant 

17 participants in any given year, including any bank18 ruptcy trust credits that may be due under section 

19 222(e), such monies— 

20 (A) at the discretion of the Administrator, 

21 may be used to provide additional adjustments 

22 under subsection (d), up to a maximum aggre23 gate of $50,000,000 in such year; and 

24 (B) to the extent not used under subpara25 graph (A), shall be placed in a defendant guarVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00159 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 anteed payment account established within the 

2 Fund by the Administrator. 

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

4 the defendant guaranteed payment account shall be 

5 preserved and administered like the remainder of the 

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

7 (A) to ensure the minimum aggregate an8 nual payment set forth in subsection (h) net of 

9 any adjustments under subsection (d) is 

10 reached each year; and 

11 (B) if the condition set forth in subsection 

12 (a)(2) is met, for any purpose that the Fund 

13 may serve under this Act. 

14 (l) GUARANTEED PAYMENT SURCHARGE.— 

15 (1) IN GENERAL.—To the extent there are in16 sufficient monies in the defendant guaranteed pay17 ment account established in subsection (k) to attain 

18 the minimum aggregate annual payment net of any 

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

20 the Administrator may impose on each defendant 

21 participant a surcharge as necessary to raise the bal22 ance required to attain the minimum aggregate an23 nual payment net of any adjustments under sub24 section (d), as provided in this subsection. Any such 

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


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1 accordance with each defendant participant’s relative 

2 annual liability under sections 202 and 203 (as 

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

4 section). 

5 (2) CERTIFICATION.— 

6 (A) IN GENERAL.—Before imposing a 

7 guaranteed payment surcharge under this sub8 section, the Administrator shall certify that he 

9 or she has used all reasonable efforts to collect 

10 mandatory payments for all defendant partici11 pants, including by using the authority in sub12 section (i)(9) of this section and section 223. 

13 (B) NOTICE AND COMMENT.—Before mak14 ing a final certification under subparagraph 

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

16 the Federal Register of a proposed certification 

17 and provide in such notice for a public comment 

18 period of 30 days. 

19 (C) FINAL CERTIFICATION.— 

20 (i) IN GENERAL.—The Administrator 

21 shall publish a notice of the final certifi22 cation in the Federal Register after consid23 eration of all comments submitted under 

24 subparagraph (B). 


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1 (ii) WRITTEN NOTICE.—Not later 

2 than 30 days after publishing any final 

3 certification under clause (i), the Adminis4 trator shall provide each defendant partici5 pant with written notice of that defendant 

6 participant’s payment, including the 

7 amount of any surcharge. 

8 SEC. 205. STEPDOWNS AND FUNDING HOLIDAYS. 

9 (a) STEPDOWNS.— 

10 (1) IN GENERAL.—Subject to paragraph (2), 

11 the minimum aggregate annual funding obligation 

12 under section 204(h) shall be reduced by 10 percent 

13 of the initial minimum aggregate funding obligation 

14 at the end of the tenth, fifteenth, twentieth, and 

15 twenty-fifth years after the date of enactment of this 

16 Act. The reductions under this paragraph shall be 

17 applied on an equal pro rata basis to the funding ob18 ligations of all defendant participants, except with 

19 respect to defendant participants in Tier 1, Subtiers 

20 2 and 3, and class action trusts. 

21 (2) LIMITATION.—The Administrator shall sus22 pend, cancel, reduce, or delay any reduction under 

23 paragraph (1) if at any time the Administrator 

24 finds, in accordance with subsection (c), that such 

25 action is necessary and appropriate to ensure that 


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1 the assets of the Fund and expected future pay2 ments remain sufficient to satisfy the Fund’s antici3 pated obligations. 

4 (b) FUNDING HOLIDAYS.— 

5 (1) IN GENERAL.—If the Administrator deter6 mines, at any time after 10 years following the date 

7 of enactment of this Act, that the assets of the Fund 

8 at the time of such determination and expected fu9 ture payments, taking into consideration any reduc10 tions under subsection (a), are sufficient to satisfy 

11 the Fund’s anticipated obligations without the need 

12 for all, or any portion of, that year’s payment other13 wise required under this subtitle, the Administrator 

14 shall reduce or waive all or any part of the payments 

15 required from defendant participants for that year. 

16 (2) ANNUAL REVIEW.—The Administrator shall 

17 undertake the review required by this subsection and 

18 make the necessary determination under paragraph 

19 (1) every year. 

20 (3) LIMITATIONS ON FUNDING HOLIDAYS.—Any 

21 reduction or waiver of the defendant participants’ 

22 funding obligations shall— 

23 (A) be made only to the extent the Admin24 istrator determines that the Fund will still be 


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1 able to satisfy all of its anticipated obligations; 

2 and 

3 (B) be applied on an equal pro rata basis 

4 to the funding obligations of all defendant par5 ticipants, except with respect to defendant par6 ticipants in Subtiers 2 and 3 of Tier I and class 

7 action trusts, for that year. 

8 (4) NEW INFORMATION.—If at any time the 

9 Administrator determines that a reduction or waiver 

10 under this section may cause the assets of the Fund 

11 and expected future payments to decrease to a level 

12 at which the Fund may not be able to satisfy all of 

13 its anticipated obligations, the Administrator shall 

14 revoke all or any part of such reduction or waiver 

15 to the extent necessary to ensure that the Fund’s 

16 obligations are met. Such revocations shall be ap17 plied on an equal pro rata basis to the funding obli18 gations of all defendant participants, except defend19 ant participants in Subtiers 2 and 3 of Tier I and 

20 class action trusts, for that year. 

21 (c) CERTIFICATION.— 

22 (1) IN GENERAL.—Before suspending, can23 celing, reducing, or delaying any reduction under 

24 subsection (a) or granting or revoking a reduction or 

25 waiver under subsection (b), the Administrator shall 


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1 certify that the requirements of this section are sat2 isfied. 

3 (2) NOTICE AND COMMENT.—Before making a 

4 final certification under this subsection, the Admin5 istrator shall publish a notice in the Federal Reg6 ister of a proposed certification and a statement of 

7 the basis therefor and provide in such notice for a 

8 public comment period of 30 days. 

9 (3) FINAL CERTIFICATION.— 

10 (A) IN GENERAL.—The Administrator 

11 shall publish a notice of the final certification in 

12 the Federal Register after consideration of all 

13 comments submitted under paragraph (2). 

14 (B) WRITTEN NOTICE.—Not later than 30 

15 days after publishing any final certification 

16 under subparagraph (A), the Administrator 

17 shall provide each defendant participant with 

18 written notice of that defendant’s funding obli19 gation for that year. 

20 Subtitle B—Asbestos Insurers 

21 Commission 

22 SEC. 210. DEFINITION. 

23 In this subtitle, the term ‘‘captive insurance com24 pany’’ means a company— 


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1 (1) whose entire beneficial interest is owned on 

2 the date of enactment of this Act, directly or indi3 rectly, by a defendant participant or by the ultimate 

4 parent or the affiliated group of a defendant partici5 pant; 

6 (2) whose primary commercial business during 

7 the period from calendar years 1940 through 1986 

8 was to provide insurance to its ultimate parent or 

9 affiliated group, or any portion of the affiliated 

10 group or a combination thereof; and 

11 (3) that was incorporated or operating no later 

12 than December 31, 2003. 

13 SEC. 211. ESTABLISHMENT OF ASBESTOS INSURERS COM14 MISSION. 

15 (a) ESTABLISHMENT.—There is established the As16 bestos Insurers Commission (referred to in this subtitle 

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

18 in section 212. 

19 (b) MEMBERSHIP.— 

20 (1) APPOINTMENT.—The Commission shall be 

21 composed of 5 members who shall be appointed by 

22 the President, by and with the advice and consent 

23 of the Senate. 

24 (2) QUALIFICATIONS.— 


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1 (A) EXPERTISE.—Members of the Com2 mission shall have sufficient expertise to fulfill 

3 their responsibilities under this subtitle. 

4 (B) CONFLICT OF INTEREST.— 

5 (i) IN GENERAL.—No member of the 

6 Commission appointed under paragraph 

7 (1) may be an employee or immediate fam8 ily member of an employee of an insurer 

9 participant. No member of the Commission 

10 shall be a shareholder of any insurer par11 ticipant. No member of the Commission 

12 shall be a former officer or director, or a 

13 former employee or former shareholder of 

14 any insurer participant who was such an 

15 employee, shareholder, officer, or director 

16 at any time during the 2-year period end17 ing on the date of the appointment, unless 

18 that is fully disclosed before consideration 

19 in the Senate of the nomination for ap20 pointment to the Commission. 

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

22 term ‘‘shareholder’’ shall not include a 

23 broadly based mutual fund that includes 

24 the stocks of insurer participants as a por25 tion of its overall holdings. 


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1 (C) FEDERAL EMPLOYMENT.—A member 

2 of the Commission may not be an officer or em3 ployee of the Federal Government, except by 

4 reason of membership on the Commission. 

5 (3) PERIOD OF APPOINTMENT.—Members shall 

6 be appointed for the life of the Commission. 

7 (4) VACANCIES.—Any vacancy in the Commis8 sion shall be filled in the same manner as the origi9 nal appointment. 

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

11 Chairman from among the members of the Commis12 sion. 

13 (c) MEETINGS.— 

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

15 after the date on which all members of the Commis16 sion have been appointed, the Commission shall hold 

17 its first meeting. 

18 (2) SUBSEQUENT MEETINGS.—The Commission 

19 shall meet at the call of the Chairman, as necessary 

20 to accomplish the duties under section 212. 

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

22 or hearings held without the participation of a ma23 jority of the members of the Commission. 


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1 SEC. 212. DUTIES OF ASBESTOS INSURERS COMMISSION. 

2 (a) DETERMINATION OF INSURER PAYMENT OBLIGA3 TIONS.— 

4 (1) IN GENERAL.— 

5 (A) DEFINITIONS.—For the purposes of 

6 this Act, the terms ‘‘insurer’’ and ‘‘insurer par7 ticipant’’ shall, unless stated otherwise, include 

8 direct insurers and reinsurers, as well as any 

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

10 to review and pay asbestos claims. 

11 (B) PROCEDURES FOR DETERMINING IN12 SURER PAYMENTS.—The Commission shall de13 termine the amount that each insurer partici14 pant shall be required to pay into the Fund 

15 under the procedures described in this section. 

16 The Commission shall make this determination 

17 by first promulgating a rule establishing a 

18 methodology for allocation of payments among 

19 insurer participants and then applying such 

20 methodology to determine the individual pay21 ment for each insurer participant. The method22 ology may include 1 or more allocation formulas 

23 to be applied to all insurer participants or 

24 groups of similarly situated participants. The 

25 Commission’s rule shall include a methodology 

26 for adjusting payments by insurer participants 


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1 to make up, during any applicable payment 

2 year, any amount by which aggregate insurer 

3 payments fall below the level required in para4 graph (3)(C). The Commission shall conduct a 

5 thorough study (within the time limitations 

6 under this subparagraph) of the accuracy of the 

7 reserve allocation of each insurer participant, 

8 and may request information from the Securi9 ties and Exchange Commission or any State 

10 regulatory agency. Under this procedure, not 

11 later than 120 days after the initial meeting of 

12 the Commission, the Commission shall com13 mence a rulemaking proceeding under section 

14 213(a) to propose and adopt a methodology for 

15 allocating payments among insurer participants. 

16 In proposing an allocation methodology, the 

17 Commission may consult with such actuaries 

18 and other experts as it deems appropriate. 

19 After hearings and public comment on the pro20 posed allocation methodology, the Commission 

21 shall as promptly as possible promulgate a final 

22 rule establishing such methodology. After pro23 mulgation of the final rule, the Commission 

24 shall determine the individual payment of each 


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1 insurer participant under the procedures set 

2 forth in subsection (b). 

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

4 runoff entity with asbestos-related obligations 

5 in the United States shall be subject to the 

6 Commission’s and Administrator’s authority 

7 under this Act, including allocation determina8 tions, and shall be required to fulfill its pay9 ment obligation without regard as to whether it 

10 is licensed in the United States. Every insurer 

11 participant not licensed or domiciled in the 

12 United States shall, upon the first payment to 

13 the Fund, submit a written consent to the Com14 mission’s and Administrator’s authority under 

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

16 the United States for purposes of enforcing this 

17 Act, in a form determined by the Adminis18 trator. Any insurer participant refusing to pro19 vide a written consent shall be subject to fines 

20 and penalties as provided in section 223. 

21 (D) ISSUERS OF FINITE RISK POLICIES.— 

22 (i) IN GENERAL.—The issuer of any 

23 policy of reinsurance purchased by an in24 surer participant or its affiliate after 1990 

25 that provides for a loss transfer to insure 


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1 for incurred asbestos losses and other 

2 losses (both known and unknown), includ3 ing those policies commonly referred to as 

4 ‘‘finite risk’’, ‘‘aggregate stop loss’’, ‘‘ag5 gregate excess of loss’’, or ‘‘loss portfolio 

6 transfer’’ policies, shall be obligated to 

7 make payments required under this Act di8 rectly to the Fund on behalf of the insurer 

9 participant who is the beneficiary of such 

10 policy, subject to the underlying retention 

11 and the limits of liability applicable to such 

12 policy. 

13 (ii) PAYMENTS.—Payments to the 

14 Fund required under this Act shall be 

15 treated as loss payments for asbestos bod16 ily injury (as if such payments were in17 curred as liabilities imposed in the tort 

18 system) and shall not be subject to exclu19 sion under policies described under clause 

20 (i) as a liability with respect to tax or as21 sessment. Within 90 days after the sched22 uled date to make an annual payment to 

23 the Fund, the insurer participant shall, at 

24 its discretion, direct the reinsurer issuing 

25 such policy to pay all or a portion of the 


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1 annual payment directly to the Fund up to 

2 the full applicable limits of liability under 

3 the policy. The reinsurer issuing such pol4 icy shall be obligated to make such pay5 ments directly to the Fund and shall be 

6 subject to the enforcement provisions 

7 under section 223. The insurer participant 

8 shall remain obligated to make payment to 

9 the Fund of that portion of the annual 

10 payment not directed to the issuer of such 

11 reinsurance policy. 

12 (2) AMOUNT OF PAYMENTS.— 

13 (A) AGGREGATE PAYMENT OBLIGATION.— 

14 The total payment required of all insurer par15 ticipants over the life of the Fund shall be 

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

17 (B) ACCOUNTING STANDARDS.—In deter18 mining the payment obligations of participants 

19 that are not licensed or domiciled in the United 

20 States or that are runoff entities, the Commis21 sion shall use accounting standards required for 

22 United States licensed direct insurers. 

23 (C) CAPTIVE INSURANCE COMPANIES.—No 

24 payment to the Fund shall be required from a 

25 captive insurance company, unless and only to 


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1 the extent a captive insurance company, on the 

2 date of enactment of this Act, has liability, di3 rectly or indirectly, for any asbestos claim of a 

4 person or persons other than and unaffiliated 

5 with its ultimate parent or affiliated group or 

6 pool in which the ultimate parent participates 

7 or participated, or unaffiliated with a person 

8 that was its ultimate parent or a member of its 

9 affiliated group or pool at the time the relevant 

10 insurance or reinsurance was issued by the cap11 tive insurance company. 

12 (D) SEVERAL LIABILITY.—Unless other13 wise provided under this Act, each insurer par14 ticipant’s obligation to make payments to the 

15 Fund is several. Unless otherwise provided 

16 under this Act, there is no joint liability, and 

17 the future insolvency by any insurer participant 

18 shall not affect the payment required of any 

19 other insurer participant. 

20 (3) PAYMENT OF CRITERIA.— 

21 (A) INCLUSION IN INSURER PARTICIPANT

22 CATEGORY.— 

23 (i) IN GENERAL.—Insurers that have 

24 paid, or been assessed by a legal judgment 

25 or settlement, at least $1,000,000 in deVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00174 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 fense and indemnity costs before the date 

2 of enactment of this Act in response to 

3 claims for compensation for asbestos inju4 ries arising from a policy of liability insur5 ance or contract of liability reinsurance or 

6 retrocessional reinsurance shall be insurer 

7 participants in the Fund. Other insurers 

8 shall be exempt from mandatory payments. 

9 (ii) INAPPLICABILITY OF SECTION

10 202.—Since insurers may be subject in cer11 tain jurisdictions to direct action suits, and 

12 it is not the intent of this Act to impose 

13 upon an insurer, due to its operation as an 

14 insurer, payment obligations to the Fund 

15 in situations where the insurer is the sub16 ject of a direct action, no insurer subject 

17 to mandatory payments under section 212 

18 shall also be liable for payments to the 

19 Fund as a defendant participant under 

20 section 202. 

21 (B) INSURER PARTICIPANT ALLOCATION

22 METHODOLOGY.— 

23 (i) IN GENERAL.—The Commission 

24 shall establish the payment obligations of 

25 individual insurer participants to reflect, 


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1 on an equitable basis, the relative tort sys2 tem liability of the participating insurers in 

3 the absence of this Act, considering and 

4 weighting, as appropriate (but exclusive of 

5 workers’ compensation), such factors as— 

6 (I) historic premium for lines of 

7 insurance associated with asbestos ex8 posure over relevant periods of time; 

9 (II) recent loss experience for as10 bestos liability; 

11 (III) amounts reserved for asbes12 tos liability; 

13 (IV) the likely cost to each in14 surer participant of its future liabil15 ities under applicable insurance poli16 cies; and 

17 (V) any other factor the Commis18 sion may determine is relevant and 

19 appropriate. 

20 (ii) DETERMINATION OF RESERVES.— 

21 The Commission may establish procedures 

22 and standards for determination of the as23 bestos reserves of insurer participants. The 

24 reserves of a United States licensed rein25 surer that is wholly owned by, or under 


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1 common control of, a United States li2 censed direct insurer shall be included as 

3 part of the direct insurer’s reserves when 

4 the reinsurer’s financial results are in5 cluded as part of the direct insurer’s 

6 United States operations, as reflected in 

7 footnote 33 of its filings with the National 

8 Association of Insurance Commissioners or 

9 in published financial statements prepared 

10 in accordance with generally accepted ac11 counting principles. 

12 (C) PAYMENT SCHEDULE.—The aggregate 

13 annual amount of payments by insurer partici14 pants over the life of the Fund shall be as fol15 lows: 

16 (i) For years 1 and 2, $2,700,000,000 

17 annually. 

18 (ii) For years 3 through 5, 

19 $5,075,000,000 annually. 

20 (iii) For years 6 through 27, 

21 $1,147,000,000 annually. 

22 (iv) For year 28, $166,000,000. 

23 (D) CERTAIN RUNOFF ENTITIES.— 

24 (i) IN GENERAL.—Whenever the Com25 mission requires payments by a runoff enVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00177 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 tity that has assumed asbestos-related li2 abilities from a Lloyd’s syndicate or names 

3 that are members of such a syndicate, the 

4 Commission shall not require payments 

5 from such syndicates and names to the ex6 tent that the runoff entity makes its re7 quired payments. In addition, such syn8 dicates and names shall be required to 

9 make payments to the Fund in the amount 

10 of any adjustment granted to the runoff 

11 entity for severe financial hardship or ex12 ceptional circumstances. 

13 (ii) INCLUDED RUNOFF ENTITIES.— 

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

15 include any direct insurer or reinsurer 

16 whose asbestos liability reserves have been 

17 transferred, directly or indirectly, to the 

18 runoff entity and on whose behalf the run19 off entity handles or adjusts and, where 

20 appropriate, pays asbestos claims. 

21 (E) FINANCIAL HARDSHIP AND EXCEP22 TIONAL CIRCUMSTANCE ADJUSTMENTS.— 

23 (i) IN GENERAL.—Under the proce24 dures established in subsection (b), an in25 surer participant may seek adjustment of 


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1 the amount of its payments based on ex2 ceptional circumstances or severe financial 

3 hardship. 

4 (ii) FINANCIAL ADJUSTMENTS.—An 

5 insurer participant may qualify for an ad6 justment based on severe financial hard7 ship by demonstrating that payment of the 

8 amounts required by the Commission’s 

9 methodology would jeopardize the solvency 

10 of such participant. 

11 (iii) EXCEPTIONAL CIRCUMSTANCE

12 ADJUSTMENT.—An insurer participant 

13 may qualify for an adjustment based on 

14 exceptional circumstances by dem15 onstrating— 

16 (I) that the amount of its pay17 ments under the Commission’s alloca18 tion methodology is exceptionally in19 equitable when measured against the 

20 amount of the likely cost to the par21 ticipant of its future liability in the 

22 tort system in the absence of the 

23 Fund; 


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1 (II) an offset credit as described 

2 in subparagraphs (A) and (C) of sub3 section (b)(4); or 

4 (III) other exceptional cir5 cumstances. 

6 The Commission may determine whether 

7 to grant an adjustment and the size of any 

8 such adjustment, but adjustments shall not 

9 reduce the aggregate payment obligations 

10 of insurer participants specified in para11 graph (2)(A) and subparagraph (C) of this 

12 paragraph. 

13 (iv) TIME PERIOD OF ADJUSTMENT.— 

14 Except for adjustments for offset credits, 

15 adjustments granted under this subsection 

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

17 insurer participant may renew its adjust18 ment by demonstrating to the Adminis19 trator that it remains justified. 

20 (b) PROCEDURE FOR NOTIFYING INSURER PARTICI21 PANTS OF INDIVIDUAL PAYMENT OBLIGATIONS.— 

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

23 30 days after promulgation of the final rule estab24 lishing an allocation methodology under subsection 

25 (a)(1), the Commission shall— 


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1 (A) directly notify all reasonably identifi2 able insurer participants of the requirement to 

3 submit information necessary to calculate the 

4 amount of any required payment to the Fund 

5 under the allocation methodology; and 

6 (B) publish in the Federal Register a no7 tice— 

8 (i) requiring any person who may be 

9 an insurer participant (as determined by 

10 criteria outlined in the notice) to submit 

11 such information; and 

12 (ii) that includes a list of all insurer 

13 participants notified by the Commission 

14 under subparagraph (A), and provides for 

15 30 days for the submission of comments or 

16 information regarding the completeness 

17 and accuracy of the list of identified in18 surer participants. 

19 (2) RESPONSE REQUIRED BY INDIVIDUAL IN20 SURER PARTICIPANTS.— 

21 (A) IN GENERAL.—Any person who re22 ceives notice under paragraph (1)(A), and any 

23 other person meeting the criteria specified in 

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

25 shall respond by providing the Commission with 


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1 all the information requested in the notice 

2 under a schedule or by a date established by 

3 the Commission. 

4 (B) CERTIFICATION.—The response sub5 mitted under subparagraph (A) shall be signed 

6 by a responsible corporate officer, general part7 ner, proprietor, or individual of similar author8 ity, who shall certify under penalty of law the 

9 completeness and accuracy of the information 

10 submitted. 

11 (3) NOTICE TO INSURER PARTICIPANTS OF INI12 TIAL PAYMENT DETERMINATION.— 

13 (A) IN GENERAL.— 

14 (i) NOTICE TO INSURERS.—Not later 

15 than 120 days after receipt of the informa16 tion required by paragraph (2), the Com17 mission shall send each insurer participant 

18 a notice of initial determination requiring 

19 payments to the Fund, which shall be 

20 based on the information received from the 

21 participant in response to the Commis22 sion’s request for information. An insurer 

23 participant’s payments shall be payable 

24 over the schedule established in subsection 

25 (a)(3)(C), in annual amounts proportionate 


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1 to the aggregate annual amount of pay2 ments for all insurer participants for the 

3 applicable year. 

4 (ii) PUBLIC NOTICE.—Not later than 

5 7 days after sending the notification of ini6 tial determination to insurer participants, 

7 the Commission shall publish in the Fed8 eral Register a notice listing the insurer 

9 participants that have been sent such noti10 fication, and the initial determination on 

11 the payment obligation of each identified 

12 participant. 

13 (B) NO RESPONSE; INCOMPLETE RE14 SPONSE.—If no response is received from an in15 surer participant, or if the response is incom16 plete, the initial determination requiring a pay17 ment from the insurer participant shall be 

18 based on the best information available to the 

19 Commission. 

20 (4) COMMISSION REVIEW, REVISION, AND FI21 NALIZATION OF INITIAL PAYMENT DETERMINA22 TIONS.— 

23 (A) COMMENTS FROM INSURER PARTICI24 PANTS.—Not later than 30 days after receiving 

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1 mission, an insurer participant may provide the 

2 Commission with additional information to sup3 port adjustments to the required payments to 

4 reflect severe financial hardship or exceptional 

5 circumstances, including the provision of an off6 set credit for an insurer participant for the 

7 amount of any asbestos-related payments it 

8 made or was legally obligated to make, includ9 ing payments released from an escrow, as the 

10 result of a bankruptcy judicially confirmed after 

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

12 of this Act. 

13 (B) ADDITIONAL PARTICIPANTS.—If, be14 fore the final determination of the Commission, 

15 the Commission receives information that an 

16 additional person may qualify as an insurer 

17 participant, the Commission shall require such 

18 person to submit information necessary to de19 termine whether payments from that person 

20 should be required, in accordance with the re21 quirements of this subsection. 

22 (C) REVISION PROCEDURES.—The Com23 mission shall adopt procedures for revising ini24 tial payments based on information received 

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


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1 provision requiring an offset credit for an in2 surer participant for the amount of any asbes3 tos-related payments it made or was legally ob4 ligated to make, including payments released 

5 from an escrow, as the result of a bankruptcy 

6 confirmed after May 22, 2003, but before the 

7 date of enactment of this Act. 

8 (5) EXAMINATIONS AND SUBPOENAS.— 

9 (A) EXAMINATIONS.—The Commission 

10 may conduct examinations of the books and 

11 records of insurer participants to determine the 

12 completeness and accuracy of information sub13 mitted, or required to be submitted, to the 

14 Commission for purposes of determining partic15 ipant payments. 

16 (B) SUBPOENAS.—The Commission may 

17 request the Attorney General to subpoena per18 sons to compel testimony, records, and other in19 formation relevant to its responsibilities under 

20 this section. The Attorney General may enforce 

21 such subpoena in appropriate proceedings in 

22 the United States district court for the district 

23 in which the person to whom the subpoena was 

24 addressed resides, was served, or transacts 

25 business. 


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

2 insurer participant’s payment obligation under this 

3 section, any escrow or similar account established 

4 before the date of enactment of this Act by an in5 surer participant in connection with an asbestos 

6 trust fund that has not been judicially confirmed by 

7 final order by the date of enactment of this Act shall 

8 be the property of the insurer participant and re9 turned to that insurer participant. 

10 (7) NOTICE TO INSURER PARTICIPANTS OF

11 FINAL PAYMENT DETERMINATIONS.—Not later than 

12 60 days after the notice of initial determination is 

13 sent to the insurer participants, the Commission 

14 shall send each insurer participant a notice of final 

15 determination. 

16 (c) INSURER PARTICIPANTS VOLUNTARY ALLOCA17 TION AGREEMENT.— 

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

19 the Commission proposes its rule establishing an al20 location methodology under subsection (a)(1), direct 

21 insurer participants licensed or domiciled in the 

22 United States, other direct insurer participants, re23 insurer participants licensed or domiciled in the 

24 United States, or other reinsurer participants, may 

25 submit an allocation agreement, approved by all of 


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1 the participants in the applicable group, to the Com2 mission. 

3 (2) ALLOCATION AGREEMENT.—To the extent 

4 the participants in any such applicable group volun5 tarily agree upon an allocation arrangement, any 

6 such allocation agreement shall only govern the allo7 cation of payments within that group and shall not 

8 determine the aggregate amount due from that 

9 group. 

10 (3) CERTIFICATION.—The Commission shall de11 termine whether an allocation agreement submitted 

12 under subparagraph (A) meets the requirements of 

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

14 as establishing the allocation methodology governing 

15 the individual payment obligations of the partici16 pants who are parties to the agreement. The author17 ity of the Commission under this subtitle shall, with 

18 respect to participants who are parties to a certified 

19 allocation agreement, terminate on the day after the 

20 Commission certifies such agreement. Under sub21 section (f), the Administrator shall assume responsi22 bility, if necessary, for calculating the individual 

23 payment obligations of participants who are parties 

24 to the certified agreement. 

25 (d) COMMISSION REPORT.— 


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1 (1) RECIPIENTS.—Until the work of the Com2 mission has been completed and the Commission ter3 minated, the Commission shall submit an annual re4 port, containing the information described under 

5 paragraph (2), to— 

6 (A) the Committee on the Judiciary of the 

7 Senate; 

8 (B) the Committee on the Judiciary of the 

9 House of Representatives; and 

10 (C) the Administrator. 

11 (2) CONTENTS.—The report under paragraph 

12 (1) shall state the amount that each insurer partici13 pant is required to pay to the Fund, including the 

14 payment schedule for such payments. 

15 (e) INTERIM PAYMENTS.— 

16 (1) AUTHORITY OF ADMINISTRATOR.—During 

17 the period between the date of enactment of this Act 

18 and the date when the Commission issues its final 

19 determinations of payments, the Administrator shall 

20 have the authority to require insurer participants to 

21 make interim payments to the Fund to assure ade22 quate funding by insurer participants during such 

23 period. 

24 (2) AMOUNT OF INTERIM PAYMENTS.—During 

25 any applicable year, the Administrator may require 


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1 insurer participants to make aggregate interim pay2 ments not to exceed the annual aggregate amount 

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

4 (3) ALLOCATION OF PAYMENTS.—Interim pay5 ments shall be allocated among individual insurer 

6 participants on an equitable basis as determined by 

7 the Administrator. All payments required under this 

8 subparagraph shall be credited against the partici9 pant’s ultimate payment obligation to the Fund es10 tablished by the Commission. If an interim payment 

11 exceeds the ultimate payment, the Fund shall pay 

12 interest on the amount of the overpayment at a rate 

13 determined by the Administrator. If the ultimate 

14 payment exceeds the interim payment, the partici15 pant shall pay interest on the amount of the under16 payment at the same rate. Any participant may seek 

17 an exemption from or reduction in any payment re18 quired under this subsection under the financial 

19 hardship and exceptional circumstance standards es20 tablished in subsection (a)(3)(D). 

21 (4) APPEAL OF INTERIM PAYMENT DECI22 SIONS.—A decision by the Administrator to establish 

23 an interim payment obligation shall be considered 

24 final agency action and reviewable under section 


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1 303, except that the reviewing court may not stay an 

2 interim payment during the pendency of the appeal. 

3 (f) TRANSFER OF AUTHORITY FROM THE COMMIS4 SION TO THE ADMINISTRATOR.— 

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

6 Commission under section 215, the Administrator 

7 shall assume all the responsibilities and authority of 

8 the Commission, except that the Administrator shall 

9 not have the power to modify the allocation method10 ology established by the Commission or by certified 

11 agreement or to promulgate a rule establishing any 

12 such methodology. 

13 (2) FINANCIAL HARDSHIP AND EXCEPTIONAL

14 CIRCUMSTANCE ADJUSTMENTS.—Upon termination 

15 of the Commission under section 215, the Adminis16 trator shall have the authority, upon application by 

17 any insurer participant, to make adjustments to an18 nual payments upon the same grounds as provided 

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

20 this subsection shall have a term not to exceed 3 

21 years. An insurer participant may renew its adjust22 ment by demonstrating that it remains justified. 

23 Upon the grant of any adjustment, the Adminis24 trator shall increase the payments required of all 

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1 tion in the aggregate payment required of all insurer 

2 participants for the applicable years. The increase in 

3 an insurer participant’s required payment shall be in 

4 proportion to such participant’s share of the aggre5 gate payment obligation of all insurer participants. 

6 (3) FINANCIAL SECURITY REQUIREMENTS.— 

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

8 claims payment rating or Standard and Poor’s fi9 nancial strength rating falls below A¥, and until 

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

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

12 equal to or greater than A¥, the Administrator 

13 shall have the authority to require that the partici14 pating insurer either— 

15 (A) pay the present value of its remaining 

16 Fund payments at a discount rate determined 

17 by the Administrator; or 

18 (B) provide an evergreen letter of credit or 

19 financial guarantee for future payments issued 

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

21 payment rating or Standard & Poor’s financial 

22 strength rating of at least A+. 

23 (g) JUDICIAL REVIEW.—The Commission’s rule es24 tablishing an allocation methodology, its final determinaVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00191 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 tions of payment obligations and other final action shall 

2 be judicially reviewable as provided in title III. 

3 SEC. 213. POWERS OF ASBESTOS INSURERS COMMISSION. 

4 (a) RULEMAKING.—The Commission shall promul5 gate such rules and regulations as necessary to implement 

6 its authority under this Act, including regulations gov7 erning an allocation methodology. Such rules and regula8 tions shall be promulgated after providing interested par9 ties with the opportunity for notice and comment. 

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

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

12 testimony, and receive such evidence as the Commission 

13 considers advisable to carry out this Act. The Commission 

14 shall also hold a hearing on any proposed regulation estab15 lishing an allocation methodology, before the Commis16 sion’s adoption of a final regulation. 

17 (c) INFORMATION FROM FEDERAL AND STATE

18 AGENCIES.—The Commission may secure directly from 

19 any Federal or State department or agency such informa20 tion as the Commission considers necessary to carry out 

21 this Act. Upon request of the Chairman of the Commis22 sion, the head of such department or agency shall furnish 

23 such information to the Commission. 

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

25 the United States mails in the same manner and under 


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1 the same conditions as other departments and agencies of 

2 the Federal Government. 

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

4 dispose of gifts or donations of services or property. 

5 (f) EXPERT ADVICE.—In carrying out its responsibil6 ities, the Commission may enter into such contracts and 

7 agreements as the Commission determines necessary to 

8 obtain expert advice and analysis. 

9 SEC. 214. PERSONNEL MATTERS. 

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

11 the Commission shall be compensated at a rate equal to 

12 the daily equivalent of the annual rate of basic pay pre13 scribed for level IV of the Executive Schedule under sec14 tion 5315 of title 5, United States Code, for each day (in15 cluding travel time) during which such member is engaged 

16 in the performance of the duties of the Commission. 

17 (b) TRAVEL EXPENSES.—The members of the Com18 mission shall be allowed travel expenses, including per 

19 diem in lieu of subsistence, at rates authorized for employ20 ees of agencies under subchapter I of chapter 57 of title 

21 5, United States Code, while away from their homes or 

22 regular places of business in the performance of services 

23 for the Commission. 

24 (c) STAFF.— 


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1 (1) IN GENERAL.—The Chairman of the Com2 mission may, without regard to the civil service laws 

3 and regulations, appoint and terminate an executive 

4 director and such other additional personnel as may 

5 be necessary to enable the Commission to perform 

6 its duties. The employment of an executive director 

7 shall be subject to confirmation by the Commission. 

8 (2) COMPENSATION.—The Chairman of the 

9 Commission may fix the compensation of the execu10 tive director and other personnel without regard to 

11 chapter 51 and subchapter III of chapter 53 of title 

12 5, United States Code, relating to classification of 

13 positions and General Schedule pay rates, except 

14 that the rate of pay for the executive director and 

15 other personnel may not exceed the rate payable for 

16 level V of the Executive Schedule under section 5316 

17 of such title. 

18 (d) DETAIL OF GOVERNMENT EMPLOYEES.—Any 

19 Federal Government employee may be detailed to the 

20 Commission without reimbursement, and such detail shall 

21 be without interruption or loss of civil service status or 

22 privilege. 

23 (e) PROCUREMENT OF TEMPORARY AND INTERMIT24 TENT SERVICES.—The Chairman of the Commission may 

25 procure temporary and intermittent services under section 


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1 3109(b) of title 5, United States Code, at rates for individ2 uals which do not exceed the daily equivalent of the annual 

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

4 Schedule under section 5316 of such title. 

5 SEC. 215. TERMINATION OF ASBESTOS INSURERS COMMIS6 SION. 

7 The Commission shall terminate 90 days after the 

8 last date on which the Commission makes a final deter9 mination of contribution under section 212(b) or 90 days 

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

11 is exhausted, whichever occurs later. 

12 SEC. 216. EXPENSES AND COSTS OF COMMISSION. 

13 All expenses of the Commission shall be paid from 

14 the Fund. 

15 Subtitle C—Asbestos Injury Claims 

16 Resolution Fund 

17 SEC. 221. ESTABLISHMENT OF ASBESTOS INJURY CLAIMS 

18 RESOLUTION FUND. 

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

20 Office of Asbestos Disease Compensation the Asbestos In21 jury Claims Resolution Fund, which shall be available to 

22 pay— 

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

24 condition determined under title I; 


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1 (2) claims for reimbursement for medical moni2 toring determined under title I; 

3 (3) principal and interest on borrowings under 

4 subsection (b); 

5 (4) the remaining obligations to the asbestos 

6 trust of a debtor and the class action trust under 

7 section 405(f)(8); and 

8 (5) administrative expenses to carry out the 

9 provisions of this Act. 

10 (b) BORROWING AUTHORITY.— 

11 (1) IN GENERAL.—The Administrator is au12 thorized to borrow from time to time amounts as set 

13 forth in this subsection, for purposes of enhancing li14 quidity available to the Fund for carrying out the 

15 obligations of the Fund under this Act. The Admin16 istrator may authorize borrowing in such form, over 

17 such term, with such necessary disclosure to its 

18 lenders as will most efficiently enhance the Fund’s 

19 liquidity. 

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

21 the general authority in paragraph (1), the Adminis22 trator may borrow from the Federal Financing Bank 

23 in accordance with section 6 of the Federal Financ24 ing Bank Act of 1973 (12 U.S.C. 2285), as needed 


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1 for performance of the Administrator’s duties under 

2 this Act for the first 5 years. 

3 (3) BORROWING CAPACITY.—The maximum 

4 amount that may be borrowed under this subsection 

5 at any given time is the amount that, taking into ac6 count all payment obligations related to all previous 

7 amounts borrowed in accordance with this sub8 section and all committed obligations of the Fund at 

9 the time of borrowing, can be repaid in full (with in10 terest) in a timely fashion from— 

11 (A) the available assets of the Fund as of 

12 the time of borrowing; and 

13 (B) all amounts expected to be paid by 

14 participants during the subsequent 10 years. 

15 (4) REPAYMENT OBLIGATIONS.—Repayment of 

16 monies borrowed by the Administrator under this 

17 subsection is limited solely to amounts available in 

18 the Asbestos Injury Claims Resolution Fund estab19 lished under this section. 

20 (c) LOCKBOX FOR SEVERE ASBESTOS-RELATED IN21 JURY CLAIMANTS.— 

22 (1) IN GENERAL.—Within the Fund, the Ad23 ministrator shall establish the following accounts: 

24 (A) A Mesothelioma Account, which shall 

25 be used solely to make payments to claimants 


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1 eligible for an award under the criteria of Level 

2 IX. 

3 (B) A Lung Cancer Account, which shall 

4 be used solely to make payments to claimants 

5 eligible for an award under the criteria of Level 

6 VIII. 

7 (C) A Severe Asbestosis Account, which 

8 shall be used solely to make payments to claim9 ants eligible for an award under the criteria of 

10 Level V. 

11 (D) A Moderate Asbestosis Account, which 

12 shall be used solely to make payments to claim13 ants eligible for an award under the criteria of 

14 Level IV. 

15 (2) ALLOCATION.—The Administrator shall al16 locate to each of the 4 accounts established under 

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

18 Fund adequate to compensate all anticipated claim19 ants for each account. Within 60 days after the date 

20 of enactment of this Act, and periodically during the 

21 life of the Fund, the Administrator shall determine 

22 an appropriate amount to allocate to each account 

23 after consulting appropriate epidemiological and sta24 tistical studies. 

25 (d) AUDIT AUTHORITY.— 


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1 (1) IN GENERAL.—For the purpose of 

2 ascertaining the correctness of any information pro3 vided or payments made to the Fund, or deter4 mining whether a person who has not made a pay5 ment to the Fund was required to do so, or deter6 mining the liability of any person for a payment to 

7 the Fund, or collecting any such liability, or inquir8 ing into any offense connected with the administra9 tion or enforcement of this title, the Administrator 

10 is authorized— 

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

12 or other data which may be relevant or material 

13 to such inquiry; 

14 (B) to summon the person liable for a pay15 ment under this title, or officer or employee of 

16 such person, or any person having possession, 

17 custody, or care of books of account containing 

18 entries relating to the business of the person 

19 liable or any other person the Administrator 

20 may deem proper, to appear before the Admin21 istrator at a time and place named in the sum22 mons and to produce such books, papers, 

23 records, or other data, and to give such testi24 mony, under oath, as may be relevant or mate25 rial to such inquiry; and 


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1 (C) to take such testimony of the person 

2 concerned, under oath, as may be relevant or 

3 material to such inquiry. 

4 (2) FALSE, FRAUDULENT, OR FICTITIOUS

5 STATEMENTS OR PRACTICES.—If the Administrator 

6 determines that materially false, fraudulent, or ficti7 tious statements or practices have been submitted or 

8 engaged in by persons submitting information to the 

9 Administrator or to the Asbestos Insurers Commis10 sion or any other person who provides evidence in 

11 support of such submissions for purposes of deter12 mining payment obligations under this Act, the Ad13 ministrator may impose a civil penalty not to exceed 

14 $10,000 on any person found to have submitted or 

15 engaged in a materially false, fraudulent, or ficti16 tious statement or practice under this Act. The Ad17 ministrator shall promulgate appropriate regulations 

18 to implement this paragraph. 

19 (e) IDENTITY OF CERTAIN DEFENDANT PARTICI20 PANTS; TRANSPARENCY.— 

21 (1) SUBMISSION OF INFORMATION.—Not later 

22 than 60 days after the date of enactment of this 

23 Act, any person who, acting in good faith, has 

24 knowledge that such person or such person’s affili25 ated group has prior asbestos expenditures of 


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1 $1,000,000 or greater, shall submit to the Adminis2 trator— 

3 (A) either the name of such person, or 

4 such person’s ultimate parent; and 

5 (B) the likely tier to which such person or 

6 affiliated group may be assigned under this Act. 

7 (2) PUBLICATION.—Not later than 20 days 

8 after the end of the 60-day period referred to in 

9 paragraph (1), the Administrator or Interim Admin10 istrator, if the Administrator is not yet appointed, 

11 shall publish in the Federal Register a list of sub12 missions required by this subsection, including the 

13 name of such persons or ultimate parents and the 

14 likely tier to which such persons or affiliated groups 

15 may be assigned. After publication of such list, any 

16 person who, acting in good faith, has knowledge that 

17 any other person has prior asbestos expenditures of 

18 $1,000,000 or greater may submit to the Adminis19 trator or Interim Administrator information on the 

20 identity of that person and the person’s prior asbes21 tos expenditures. 

22 (f) NO PRIVATE RIGHT OF ACTION.—Except as pro23 vided in sections 203(b)(2)(D)(ii) and 204(f)(3), there 

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

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1 pliance or noncompliance with this Act or the involvement 

2 of any participant in the enactment of this Act. 

3 SEC. 222. MANAGEMENT OF THE FUND. 

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

5 held for the exclusive purpose of providing benefits to as6 bestos claimants and their beneficiaries, including those 

7 provided in subsection (c), and to otherwise defray the rea8 sonable expenses of administering the Fund. 

9 (b) INVESTMENTS.— 

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

11 be administered and invested with the care, skill, 

12 prudence, and diligence, under the circumstances 

13 prevailing at the time of such investment, that a 

14 prudent person acting in a like capacity and manner 

15 would use. 

16 (2) STRATEGY.—The Administrator shall invest 

17 amounts in the Fund in a manner that enables the 

18 Fund to make current and future distributions to or 

19 for the benefit of asbestos claimants. In pursuing an 

20 investment strategy under this subparagraph, the 

21 Administrator shall consider, to the extent relevant 

22 to an investment decision or action— 

23 (A) the size of the Fund; 

24 (B) the nature and estimated duration of 

25 the Fund; 


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1 (C) the liquidity and distribution require2 ments of the Fund; 

3 (D) general economic conditions at the 

4 time of the investment; 

5 (E) the possible effect of inflation or defla6 tion on Fund assets; 

7 (F) the role that each investment or course 

8 of action plays with respect to the overall assets 

9 of the Fund; 

10 (G) the expected amount to be earned (in11 cluding both income and appreciation of cap12 ital) through investment of amounts in the 

13 Fund; and 

14 (H) the needs of asbestos claimants for 

15 current and future distributions authorized 

16 under this Act. 

17 (c) MESOTHELIOMA RESEARCH AND TREATMENT

18 CENTERS.— 

19 (1) IN GENERAL.—The Administrator shall pro20 vide $1,000,000 from the Fund for each of fiscal 

21 years 2005 through 2009 for each of up to 10 meso22 thelioma disease research and treatment centers. 

23 (2) REQUIREMENTS.—The Centers shall— 

24 (A) be chosen by the Director of the Na25 tional Institutes of Health; 


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1 (B) be chosen through competitive peer re2 view; 

3 (C) be geographically distributed through4 out the United States with special consideration 

5 given to areas of high incidence of mesothe6 lioma disease; 

7 (D) be closely associated with Department 

8 of Veterans Affairs medical centers to provide 

9 research benefits and care to veterans who have 

10 suffered excessively from mesothelioma; 

11 (E) be engaged in research to provide 

12 mechanisms for detection and prevention of 

13 mesothelioma, particularly in the areas of pain 

14 management and cures; 

15 (F) be engaged in public education about 

16 mesothelioma and prevention, screening, and 

17 treatment; 

18 (G) be participants in the National Meso19 thelioma Registry; and 

20 (H) be coordinated in their research and 

21 treatment efforts with other Centers and insti22 tutions involved in exemplary mesothelioma re23 search. 

24 (d) BANKRUPTCY TRUST GUARANTEE.— 


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1 (1) IN GENERAL.—Notwithstanding any other 

2 provision of this Act, the Administrator shall have 

3 the authority to impose a pro rata surcharge on all 

4 participants under this subsection to ensure the li5 quidity of the Fund, if— 

6 (A) the declared assets from 1 or more 

7 bankruptcy trusts established under a plan of 

8 reorganization confirmed and substantially con9 summated on or before July 31, 2004, are not 

10 available to the Fund because a final judgment 

11 that has been entered by a court and is no 

12 longer subject to any appeal or review has en13 joined the transfer of assets required under sec14 tion 524(j)(2) of title 11, United States Code 

15 (as amended by section 402(f) of this Act); and 

16 (B) borrowing is insufficient to assure the 

17 Fund’s ability to meet its obligations under this 

18 Act such that the required borrowed amount is 

19 likely to increase the risk of termination of this 

20 Act under section 405 based on reasonable 

21 claims projections. 

22 (2) ALLOCATION.—Any surcharge imposed 

23 under this subsection shall be imposed over a period 

24 of 5 years on a pro rata basis upon all participants, 

25 in accordance with each participant’s relative annual 


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1 liability under this subtitle and subtitle B for those 

2 5 years. 

3 (3) CERTIFICATION.— 

4 (A) IN GENERAL.—Before imposing a sur5 charge under this subsection, the Administrator 

6 shall publish a notice in the Federal Register 

7 and provide in such notice for a public comment 

8 period of 30 days. 

9 (B) CONTENTS OF NOTICE.—The notice 

10 required under subparagraph (A) shall in11 clude— 

12 (i) information explaining the cir13 cumstances that make a surcharge nec14 essary and a certification that the require15 ments under paragraph (1) are met; 

16 (ii) the amount of the declared assets 

17 from any trust established under a plan of 

18 reorganization confirmed and substantially 

19 consummated on or before July 31, 2004, 

20 that was not made, or is no longer, avail21 able to the Fund; 

22 (iii) the total aggregate amount of the 

23 necessary surcharge; and 


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1 (iv) the surcharge amount for each 

2 tier and subtier of defendant participants 

3 and for each insurer participant. 

4 (C) FINAL NOTICE.—The Administrator 

5 shall publish a final notice in the Federal Reg6 ister and provide each participant with written 

7 notice of that participant’s schedule of pay8 ments under this subsection. In no event shall 

9 any required surcharge under this subsection be 

10 due before 60 days after the Administrator 

11 publishes the final notice in the Federal Reg12 ister and provides each participant with written 

13 notice of its schedule of payments. 

14 (4) MAXIMUM AMOUNT.—In no event shall the 

15 total aggregate surcharge imposed by the Adminis16 trator exceed the lesser of— 

17 (A) the total aggregate amount of the de18 clared assets of the trusts established under a 

19 plan of reorganization confirmed and substan20 tially consummated prior to July 31, 2004, that 

21 are no longer available to the Fund; or 

22 (B) $4,000,000,000. 

23 (5) DECLARED ASSETS.— 

24 (A) IN GENERAL.—In this subsection, the 

25 term ‘‘declared assets’’ means— 


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1 (i) the amount of assets transferred 

2 by any trust established under a plan of 

3 reorganization confirmed and substantially 

4 consummated on or before July 31, 2004, 

5 to the Fund that is required to be returned 

6 to that trust under the final judgment de7 scribed in paragraph (1)(A); or 

8 (ii) if no assets were transferred by 

9 the trust to the Fund, the amount of as10 sets the Administrator determines would 

11 have been available for transfer to the 

12 Fund from that trust under section 402(f). 

13 (B) DETERMINATION.—In making a deter14 mination under subparagraph (A)(ii), the Ad15 ministrator may rely on any information rea16 sonably available, and may request, and use 

17 subpoena authority of the Administrator if nec18 essary to obtain, relevant information from any 

19 such trust or its trustees. 

20 (e) BANKRUPTCY TRUST CREDITS.— 

21 (1) IN GENERAL.—Notwithstanding any other 

22 provision of this Act, but subject to paragraph (2) 

23 of this subsection, the Administrator shall provide a 

24 credit toward the aggregate payment obligations 

25 under sections 202(a)(2) and 212(a)(2)(A) for asVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00208 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 sets received by the Fund from any bankruptcy trust 

2 established under a plan of reorganization confirmed 

3 and substantially consummated after July 31, 2004. 

4 (2) ALLOCATION OF CREDITS.—The Adminis5 trator shall allocate, for each such bankruptcy trust, 

6 the credits for such assets between the defendant 

7 and insurer aggregate payment obligations as fol8 lows: 

9 (A) DEFENDANT PARTICIPANTS.—The ag10 gregate amount that all persons other than in11 surers contributing to the bankruptcy trust 

12 would have been required to pay as Tier I de13 fendants under section 203(b) if the plan of re14 organization under which the bankruptcy trust 

15 was established had not been confirmed and 

16 substantially consummated and the proceeding 

17 under chapter 11 of title 11, United States 

18 Code, that resulted in the establishment of the 

19 bankruptcy trust had remained pending as of 

20 the date of enactment of this Act. 

21 (B) INSURER PARTICIPANTS.—The aggre22 gate amount of all credits to which insurers are 

23 entitled to under section 202(c)(4)(A) of the 

24 Act. 


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1 SEC. 223. ENFORCEMENT OF PAYMENT OBLIGATIONS. 

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

3 payment in the amount of and according to the schedule 

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

5 demand and a 30-day opportunity to cure the default, 

6 there shall be a lien in favor of the United States for the 

7 amount of the delinquent payment (including interest) 

8 upon all property and rights to property, whether real or 

9 personal, belonging to such participant. 

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

11 insolvency proceeding, the lien imposed under subsection 

12 (a) shall be treated in the same manner as a lien for taxes 

13 due and owing to the United States for purposes of the 

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

15 3713(a) of title 31, United States Code. The United 

16 States Bankruptcy Court shall have jurisdiction over any 

17 issue or controversy regarding lien priority and lien perfec18 tion arising in a bankruptcy case due to a lien imposed 

19 under subsection (a). 

20 (c) CIVIL ACTION.— 

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

22 has been a refusal or failure to pay any liability im23 posed under this Act, the Administrator may bring 

24 a civil action in the United States District Court for 

25 the District of Columbia, or any other appropriate 

26 lawsuit or proceeding outside of the United States— 


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

2 the United States imposed under this section; 

3 (B) to subject any property of the partici4 pant, including any property in which the par5 ticipant has any right, title, or interest to the 

6 payment of such liability; or 

7 (C) for temporary, preliminary, or perma8 nent relief. 

9 (2) ADDITIONAL PENALTIES.—In any action 

10 under paragraph (1) in which the refusal or failure 

11 to pay was willful, the Administrator may seek re12 covery— 

13 (A) of punitive damages; 

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

15 this subsection, including reasonable fees in16 curred for collection, expert witnesses, and at17 torney’s fees; and 

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

19 fine equal to the total amount of the liability 

20 that has not been collected. 

21 (d) ENFORCEMENT AUTHORITY AS TO INSURER PAR22 TICIPANTS.— 

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

24 the enforcement remedies described in subsection 

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


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1 in satisfaction of a payment not timely paid by an 

2 insurer participant under the procedures under this 

3 subsection. 

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

5 establish personal jurisdiction over nonpaying in6 surer participants, the Administrator shall be 

7 deemed to be subrogated to the contractual rights of 

8 participants to seek recovery from nonpaying insur9 ing participants that are domiciled outside the 

10 United States under the policies of liability insur11 ance or contracts of liability reinsurance or 

12 retrocessional reinsurance applicable to asbestos 

13 claims, and the Administrator may bring an action 

14 or an arbitration against the nonpaying insurer par15 ticipants under the provisions of such policies and 

16 contracts, provided that— 

17 (A) any amounts collected under this sub18 section shall not increase the amount of deemed 

19 erosion allocated to any policy or contract under 

20 section 404, or otherwise reduce coverage avail21 able to a participant; and 

22 (B) subrogation under this subsection shall 

23 have no effect on the validity of the insurance 

24 policies or reinsurance, and any contrary State 

25 law is expressly preempted. 


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1 (3) RECOVERABILITY OF CONTRIBUTION.—For 

2 purposes of this subsection— 

3 (A) all contributions to the Fund required 

4 of a participant shall be deemed to be sums le5 gally required to be paid for bodily injury re6 sulting from exposure to asbestos; 

7 (B) all contributions to the Fund required 

8 of any participant shall be deemed to be a sin9 gle loss arising from a single occurrence under 

10 each contract to which the Administrator is 

11 subrogated; and 

12 (C) with respect to reinsurance contracts, 

13 all contributions to the Fund required of a par14 ticipant shall be deemed to be payments to a 

15 single claimant for a single loss. 

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

17 brought under this subsection, the nonpaying insurer 

18 or reinsurer shall be entitled to no credit or offset 

19 for amounts collectible or potentially collectible from 

20 any participant nor shall such defaulting participant 

21 have any right to collect any sums payable under 

22 this section from any participant. 

23 (5) COOPERATION.—Insureds and cedents shall 

24 cooperate with the Administrator’s reasonable re25 quests for assistance in any such proceeding. The 


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1 positions taken or statements made by the Adminis2 trator in any such proceeding shall not be binding 

3 on or attributed to the insureds or cedents in any 

4 other proceeding. The outcome of such a proceeding 

5 shall not have a preclusive effect on the insureds or 

6 cedents in any other proceeding and shall not be ad7 missible against any subrogee under this section. 

8 The Administrator shall have the authority to settle 

9 or compromise any claims against a nonpaying in10 surer participant under this subsection. 

11 (e) BAR ON UNITED STATES BUSINESS.—If any di12 rect insurer or reinsurer refuses to furnish any informa13 tion requested by or to pay any contribution required by 

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

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

16 such entity and its affiliates from insuring risks located 

17 within the United States or otherwise doing business with18 in the United States. Insurer participants or their affili19 ates seeking to obtain a license from any State to write 

20 any type of insurance shall be barred from obtaining any 

21 such license until payment of all contributions required as 

22 of the date of license application. 

23 (f) CREDIT FOR REINSURANCE.—If the Adminis24 trator determines that an insurer participant that is a re25 insurer is in default in paying any required contribution 


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1 or otherwise not in compliance with this Act, the Adminis2 trator may issue an order barring any direct insurer par3 ticipant from receiving credit for reinsurance purchased 

4 from the defaulting reinsurer. Any State law governing 

5 credit for reinsurance to the contrary is preempted. 

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

7 this section, the participant shall be barred from bringing 

8 any challenge to any determination of the Administrator 

9 or the Asbestos Insurers Commission regarding its liability 

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

11 any provision thereof, if such challenge could have been 

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

13 or in a judicial review proceeding under section 303. 

14 (h) DEPOSIT OF FUNDS.— 

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

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

17 (A) deposited in the Fund; and 

18 (B) used only to pay— 

19 (i) claims for awards for an eligible 

20 disease or condition determined under title 

21 I; or 

22 (ii) claims for reimbursement for med23 ical monitoring determined under title I. 


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

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

3 have no effect on— 

4 (A) the assessment of contributions under 

5 subtitles A and B; or 

6 (B) any other provision of this Act. 

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

8 title 11, United States Code, is amended— 

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

10 the end; 

11 (2) in paragraph (5), by striking ‘‘prohibition.’’ 

12 and inserting ‘‘prohibition; or’’; and 

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

14 the last undesignated sentence the following: 

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

16 the amount of an award granted from the Asbestos 

17 Injury Claims Resolution Fund established under 

18 the Fairness in Asbestos Injury Resolution Act of 

19 2005.’’. 

20 SEC. 224. INTEREST ON UNDERPAYMENT OR NONPAYMENT. 

21 If any amount of payment obligation under this title 

22 is not paid on or before the last date prescribed for pay23 ment, the liable party shall pay interest on such amount 

24 at the Federal short-term rate determined under section 

25 6621(b) of the Internal Revenue Code of 1986, plus 5 perVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00216 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 centage points, for the period from such last date to the 

2 date paid. 

3 SEC. 225. EDUCATION, CONSULTATION, SCREENING, AND 

4 MONITORING. 

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

6 a program for the education, consultation, medical screen7 ing, and medical monitoring of persons with exposure to 

8 asbestos. The program shall be funded by the Fund. 

9 (b) OUTREACH AND EDUCATION.— 

10 (1) IN GENERAL.—Not later than 1 year after 

11 the date of enactment of this Act, the Administrator 

12 shall establish an outreach and education program, 

13 including a website designed to provide information 

14 about asbestos-related medical conditions to mem15 bers of populations at risk of developing such condi16 tions. 

17 (2) INFORMATION.—The information provided 

18 under paragraph (1) shall include information 

19 about— 

20 (A) the signs and symptoms of asbestos-re21 lated medical conditions; 

22 (B) the value of appropriate medical 

23 screening programs; and 


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1 (C) actions that the individuals can take to 

2 reduce their future health risks related to as3 bestos exposure. 

4 (3) CONTRACTS.—Preference in any contract 

5 under this subsection shall be given to providers that 

6 are existing nonprofit organizations with a history 

7 and experience of providing occupational health out8 reach and educational programs for individuals ex9 posed to asbestos. 

10 (c) MEDICAL SCREENING PROGRAM.— 

11 (1) ESTABLISHMENT OF PROGRAM.—Not soon12 er than 18 months or later than 24 months after the 

13 Administrator certifies that the Fund is fully oper14 ational and processing claims at a reasonable rate, 

15 the Administrator shall adopt guidelines establishing 

16 a medical screening program for individuals at high 

17 risk of asbestos-related disease resulting from an as18 bestos-related disease. In promulgating such guide19 lines, the Administrator shall consider the views of 

20 the Advisory Committee on Asbestos Disease Com21 pensation, the Medical Advisory Committee, and the 

22 public. 

23 (2) ELIGIBILITY CRITERIA.— 

24 (A) IN GENERAL.—The guidelines promul25 gated under this subsection shall establish criVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00218 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 teria for participation in the medical screening 

2 program. 

3 (B) CONSIDERATIONS.—In promulgating 

4 eligibility criteria the Administrator shall take 

5 into consideration all factors relevant to the in6 dividual’s effective cumulative exposure to as7 bestos, including— 

8 (i) any industry in which the indi9 vidual worked; 

10 (ii) the individual’s occupation and 

11 work setting; 

12 (iii) the historical period in which ex13 posure took place; 

14 (iv) the duration of the exposure; 

15 (v) the intensity and duration of non16 occupational exposures; and 

17 (vi) any other factors that the Admin18 istrator determines relevant. 

19 (3) PROTOCOLS.—The guidelines developed 

20 under this subsection shall establish protocols for 

21 medical screening, which shall include— 

22 (A) administration of a health evaluation 

23 and work history questionnaire; 

24 (B) an evaluation of smoking history; 


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1 (C) a physical examination by a qualified 

2 physician with a doctor-patient relationship 

3 with the individual; 

4 (D) a chest x-ray read by a certified B5 reader as defined under section 121(a)(4); and 

6 (E) pulmonary function testing as defined 

7 under section 121(a)(13). 

8 (4) FREQUENCY.—The Administrator shall es9 tablish the frequency with which medical screening 

10 shall be provided or be made available to eligible in11 dividuals, which shall be not less than every 5 years. 

12 (5) PROVISION OF SERVICES.—The Adminis13 trator shall provide medical screening to eligible in14 dividuals directly or by contract with another agency 

15 of the Federal Government, with State or local gov16 ernments, or with private providers of medical serv17 ices. The Administrator shall establish strict quali18 fications for the providers of such services, and shall 

19 periodically audit the providers of services under this 

20 subsection, to ensure their integrity, high degree of 

21 competence, and compliance with all applicable tech22 nical and professional standards. No provider of 

23 medical screening services may have earned more 

24 than 15 percent of their income from the provision 

25 of services of any kind in connection with asbestos 


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1 litigation in any of the 3 years preceding the date 

2 of enactment of this Act. All contracts with pro3 viders of medical screening services under this sub4 section shall contain provisions allowing the Admin5 istrator to terminate such contracts for cause if the 

6 Administrator determines that the service provider 

7 fails to meet the qualifications established under this 

8 subsection. 

9 (6) LIMITATION OF COMPENSATION FOR SERV10 ICES.—The compensation required to be paid to a 

11 provider of medical screening services for such serv12 ices furnished to an eligible individual shall be lim13 ited to the amount that would be reimbursed at the 

14 time of the furnishing of such services under title 

15 XVIII of the Social Security Act (42 U.S.C. 1395 et 

16 seq.) for similar services if— 

17 (A) the individual were entitled to benefits 

18 under part A of such title and enrolled under 

19 part B of such title; and 

20 (B) such services are covered under title 

21 XVIII of the Social Security Act (42 U.S.C. 

22 1395 et seq.). 

23 (7) FUNDING; PERIODIC REVIEW.— 

24 (A) FUNDING.—The Administrator shall 

25 make such funds available from the Fund to 


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1 implement this section, but not more than 

2 $30,000,000 each year in each of the 5 years 

3 following the effective date of the medical 

4 screening program. Notwithstanding the pre5 ceding sentence, the Administrator shall sus6 pend the operation of the program or reduce its 

7 funding level if necessary to preserve the sol8 vency of the Fund and to prevent the sunset of 

9 the overall program under section 405(f). 

10 (B) REVIEW.—The Administrator’s first 

11 annual report under section 405 following the 

12 close of the 4th year of operation of the medical 

13 screening program shall include an analysis of 

14 the usage of the program, its cost and effective15 ness, its medical value, and the need to con16 tinue that program for an additional 5-year pe17 riod. The Administrator shall also recommend 

18 to Congress any improvements that may be re19 quired to make the program more effective, effi20 cient, and economical, and shall recommend a 

21 funding level for the program for the 5 years 

22 following the period of initial funding referred 

23 to under subparagraph (A). 

24 (d) LIMITATION.—In no event shall the total amount 

25 allocated to the medical screening program established 


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1 under this subsection over the lifetime of the Fund exceed 

2 $600,000,000. 

3 (e) MEDICAL MONITORING PROGRAM AND PROTO4 COLS.— 

5 (1) IN GENERAL.—The Administrator shall es6 tablish procedures for a medical monitoring program 

7 for persons exposed to asbestos who have been ap8 proved for level I compensation under section 131. 

9 (2) PROCEDURES.—The procedures for medical 

10 monitoring shall include— 

11 (A) specific medical tests to be provided to 

12 eligible individuals and the periodicity of those 

13 tests, which shall initially be provided every 3 

14 years and include— 

15 (i) administration of a health evalua16 tion and work history questionnaire; 

17 (ii) physical examinations, including 

18 blood pressure measurement, chest exam19 ination, and examination for clubbing; 

20 (iii) AP and lateral chest x-ray; and 

21 (iv) spirometry performed according 

22 to ATS standards; 

23 (B) qualifications of medical providers who 

24 are to provide the tests required under subpara25 graph (A); and 


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1 (C) administrative provisions for reim2 bursement from the Fund of the costs of moni3 toring eligible claimants, including the costs as4 sociated with the visits of the claimants to phy5 sicians in connection with medical monitoring, 

6 and with the costs of performing and analyzing 

7 the tests. 

8 (3) PREFERENCES.— 

9 (A) IN GENERAL.—In administering the 

10 monitoring program under this subsection, pref11 erence shall be given to medical and program 

12 providers with— 

13 (i) a demonstrated capacity for identi14 fying, contacting, and evaluating popu15 lations of workers or others previously ex16 posed to asbestos; and 

17 (ii) experience in establishing net18 works of medical providers to conduct med19 ical screening and medical monitoring ex20 aminations. 

21 (B) PROVISION OF LISTS.—Claimants that 

22 are eligible to participate in the medical moni23 toring program shall be provided with a list of 

24 approved providers in their geographic area at 


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1 the time such claimants become eligible to re2 ceive medical monitoring. 

3 (f) CONTRACTS.—The Administrator may enter into 

4 contracts with qualified program providers that would per5 mit the program providers to undertake large-scale med6 ical screening and medical monitoring programs by means 

7 of subcontracts with a network of medical providers, or 

8 other health providers. 

9 (g) REVIEW.—Not later than 5 years after the date 

10 of enactment of this Act, and every 5 years thereafter, 

11 the Administrator shall review, and if necessary update, 

12 the protocols and procedures established under this sec13 tion. 

14 TITLE III—JUDICIAL REVIEW 

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

16 (a) EXCLUSIVE JURISDICTION.—The United States 

17 Court of Appeals for the District of Columbia Circuit shall 

18 have exclusive jurisdiction over any action to review rules 

19 or regulations promulgated by the Administrator or the 

20 Asbestos Insurers Commission under this Act. 

21 (b) PERIOD FOR FILING PETITION.—A petition for 

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

23 days after the date notice of such promulgation appears 

24 in the Federal Register. 


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1 (c) EXPEDITED PROCEDURES.—The United States 

2 Court of Appeals for the District of Columbia shall provide 

3 for expedited procedures for reviews under this section. 

4 SEC. 302. JUDICIAL REVIEW OF AWARD DECISIONS. 

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

6 or aggrieved by a final decision of the Administrator 

7 awarding or denying compensation under title I may peti8 tion for judicial review of such decision. Any petition for 

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

10 the issuance of a final decision of the Administrator. 

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

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

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

14 of the issuance of the final order. 

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

16 the decision of the Administrator unless the court deter17 mines, upon review of the record as a whole, that the deci18 sion is not supported by substantial evidence, is contrary 

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

20 by law. 

21 (d) EXPEDITED PROCEDURES.—The United States 

22 Court of Appeals shall provide for expedited procedures 

23 for reviews under this section. 


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1 SEC. 303. JUDICIAL REVIEW OF PARTICIPANTS’ ASSESS2 MENTS. 

3 (a) EXCLUSIVE JURISDICTION.—The United States 

4 Court of Appeals for the District of Columbia Circuit shall 

5 have exclusive jurisdiction over any action to review a final 

6 determination by the Administrator or the Asbestos Insur7 ers Commission regarding the liability of any person to 

8 make a payment to the Fund, including a notice of appli9 cable subtier assignment under section 204(i), a notice of 

10 financial hardship or inequity determination under section 

11 204(d), and a notice of insurer participant obligation 

12 under section 212(b). 

13 (b) PERIOD FOR FILING ACTION.—A petition for re14 view under subsection (a) shall be filed not later than 60 

15 days after a final determination by the Administrator or 

16 the Commission giving rise to the action. Any defendant 

17 participant who receives a notice of its applicable subtier 

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

19 inequity determination under section 204(d) shall com20 mence any action within 30 days after a decision on re21 hearing under section 204(i)(10), and any insurer partici22 pant who receives a notice of a payment obligation under 

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

24 after receiving such notice. The court shall give such ac25 tion expedited consideration. 


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1 SEC. 304. OTHER JUDICIAL CHALLENGES. 

2 (a) EXCLUSIVE JURISDICTION.—The United States 

3 District Court for the District of Columbia shall have ex4 clusive jurisdiction over any action for declaratory or in5 junctive relief challenging any provision of this Act. An 

6 action under this section shall be filed not later than 60 

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

8 after the final action by the Administrator or the Commis9 sion giving rise to the action, whichever is later. 

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

11 shall be reviewable on appeal directly to the Supreme 

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

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

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

15 the entry of the final decision. 

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

17 of the United States District Court for the District of Co18 lumbia and the Supreme Court of the United States to 

19 advance on the docket and to expedite to the greatest pos20 sible extent the disposition of the action and appeal. 

21 SEC. 305. STAYS, EXCLUSIVITY, AND CONSTITUTIONAL RE22 VIEW. 

23 (a) NO STAYS.—No court may issue a stay of pay24 ment by any party into the Fund pending its final judg25 ment. 


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1 (b) EXCLUSIVITY OF REVIEW.—An action of the Ad2 ministrator or the Asbestos Insurers Commission for 

3 which review could have been obtained under section 301, 

4 302, or 303 shall not be subject to judicial review in any 

5 other proceeding. 

6 (c) CONSTITUTIONAL REVIEW.— 

7 (1) IN GENERAL.—Notwithstanding any other 

8 provision of law, any interlocutory or final judgment, 

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

10 or any provision or application thereof, unconstitu11 tional shall be reviewable as a matter of right by di12 rect appeal to the Supreme Court. 

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

14 appeal shall be filed not more than 30 days after 

15 entry of such judgment, decree, or order. 

16 (3) REPAYMENT TO ASBESTOS TRUST AND

17 CLASS ACTION TRUST.—If the transfer of the assets 

18 of any asbestos trust of a debtor or any class action 

19 trust (or this Act as a whole) is held to be unconsti20 tutional or otherwise unlawful, the Fund shall trans21 fer the remaining balance of such assets (determined 

22 under section 405(f)(1)(A)(iii)) back to the appro23 priate asbestos trust or class action trust within 90 

24 days after final judicial action on the legal challenge, 

25 including the exhaustion of all appeals. 


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1 TITLE IV—MISCELLANEOUS 

2 PROVISIONS 

3 SEC. 401. FALSE INFORMATION. 

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

5 States Code, is amended by adding at the end the fol6 lowing: 

7 ‘‘§ 1348. Fraud and false statements in connection 

8 with participation in Asbestos Injury 

9 Claims Resolution Fund 

10 ‘‘(a) FRAUD RELATING TO ASBESTOS INJURY

11 CLAIMS RESOLUTION FUND.—Whoever knowingly and 

12 willfully executes, or attempts to execute, a scheme or arti13 fice to defraud the Office of Asbestos Disease Compensa14 tion or the Asbestos Insurers Commission under title II 

15 of the Fairness in Asbestos Injury Resolution Act of 2005 

16 shall be fined under this title or imprisoned not more than 

17 20 years, or both. 

18 ‘‘(b) FALSE STATEMENT RELATING TO ASBESTOS

19 INJURY CLAIMS RESOLUTION FUND.—Whoever, in any 

20 matter involving the Office of Asbestos Disease Compensa21 tion or the Asbestos Insurers Commission, knowingly and 

22 willfully— 

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

24 trick, scheme, or device a material fact; 


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

2 fraudulent statements or representations; or 

3 ‘‘(3) makes or uses any false writing or docu4 ment knowing the same to contain any materially 

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

6 connection with the award of a claim or the deter7 mination of a participant’s payment obligation under 

8 title I or II of the Fairness in Asbestos Injury Reso9 lution Act of 2005 shall be fined under this title or 

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

11 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

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

13 States Code, is amended by adding at the end the fol14 lowing: 

‘‘1348. Fraud and false statements in connection with participation in Asbestos Injury Claims Resolution Fund.’’. 

15 SEC. 402. EFFECT ON BANKRUPTCY LAWS. 

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

17 11, United States Code, is amended— 

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

19 end; 

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

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

22 (3) by inserting after paragraph (18) the fol23 lowing: 


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

2 enforcement of any payment obligations under sec3 tion 204 of the Fairness in Asbestos Injury Resolu4 tion Act of 2005, against a debtor, or the property 

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

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

7 (b) ASSUMPTION OF EXECUTORY CONTRACT.—Sec8 tion 365 of title 11, United States Code, is amended by 

9 adding at the end the following: 

10 ‘‘(p) If a debtor is a participant (as that term is de11 fined in section 3 of the Fairness in Asbestos Injury Reso12 lution Act of 2005), the trustee shall be deemed to have 

13 assumed all executory contracts entered into by the partic14 ipant under section 204 of that Act. The trustee may not 

15 reject any such executory contract.’’. 

16 (c) ALLOWED ADMINISTRATIVE EXPENSES.—Section 

17 503 of title 11, United States Code, is amended by adding 

18 at the end the following: 

19 ‘‘(c)(1) Claims or expenses of the United States, the 

20 Attorney General, or the Administrator (as that term is 

21 defined in section 3 of the Fairness in Asbestos Injury 

22 Resolution Act of 2005) based upon the asbestos payment 

23 obligations of a debtor that is a Participant (as that term 

24 is defined in section 3 of that Act), shall be paid as an 

25 allowed administrative expense. The debtor shall not be 


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1 entitled to either notice or a hearing with respect to such 

2 claims. 

3 ‘‘(2) For purposes of paragraph (1), the term ‘asbes4 tos payment obligation’ means any payment obligation 

5 under title II of the Fairness in Asbestos Injury Resolu6 tion Act of 2005.’’. 

7 (d) NO DISCHARGE.—Section 523 of title 11, United 

8 States Code, is amended by adding at the end the fol9 lowing: 

10 ‘‘(f) A discharge under section 727, 1141, 1228, or 

11 1328 of this title does not discharge any debtor that is 

12 a participant (as that term is defined in section 3 of the 

13 Fairness in Asbestos Injury Resolution Act of 2005) of 

14 the debtor’s payment obligations assessed against the par15 ticipant under title II of that Act.’’. 

16 (e) PAYMENT.—Section 524 of title 11, United States 

17 Code, is amended by adding at the end the following: 

18 ‘‘(i) PARTICIPANT DEBTORS.— 

19 ‘‘(1) IN GENERAL.—Paragraphs (2) and (3) 

20 shall apply to a debtor who— 

21 ‘‘(A) is a participant that has made prior 

22 asbestos expenditures (as such terms are de23 fined in the Fairness in Asbestos Injury Resolu24 tion Act of 2005); and 


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1 ‘‘(B) is subject to a case under this title 

2 that is pending— 

3 ‘‘(i) on the date of enactment of the 

4 Fairness in Asbestos Injury Resolution Act 

5 of 2005; or 

6 ‘‘(ii) at any time during the 1-year pe7 riod preceding the date of enactment of 

8 that Act. 

9 ‘‘(2) TIER I DEBTORS.—A debtor that has been 

10 assigned to Tier I under section 202 of the Fairness 

11 in Asbestos Injury Resolution Act of 2005, shall 

12 make payments in accordance with sections 202 and 

13 203 of that Act. 

14 ‘‘(3) TREATMENT OF PAYMENT OBLIGA15 TIONS.—All payment obligations of a debtor under 

16 sections 202 and 203 of the Fairness in Asbestos In17 jury Resolution Act of 2005 shall— 

18 ‘‘(A) constitute costs and expenses of ad19 ministration of a case under section 503 of this 

20 title; 

21 ‘‘(B) notwithstanding any case pending 

22 under this title, be payable in accordance with 

23 section 202 of that Act; 

24 ‘‘(C) not be stayed; 


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1 ‘‘(D) not be affected as to enforcement or 

2 collection by any stay or injunction of any 

3 court; and 

4 ‘‘(E) not be impaired or discharged in any 

5 current or future case under this title.’’. 

6 (f) TREATMENT OF TRUSTS.—Section 524 of title 

7 11, United States Code, as amended by this Act, is 

8 amended by adding at the end the following: 

9 ‘‘(j) ASBESTOS TRUSTS.— 

10 ‘‘(1) IN GENERAL.—A trust shall assign a por11 tion of the corpus of the trust to the Asbestos Injury 

12 Claims Resolution Fund (referred to in this sub13 section as the ‘Fund’) as established under the Fair14 ness in Asbestos Injury Resolution Act of 2005 if 

15 the trust qualifies as a ‘trust’ under section 201 of 

16 that Act. 

17 ‘‘(2) TRANSFER OF TRUST ASSETS.— 

18 ‘‘(A) IN GENERAL.— 

19 ‘‘(i) Except as provided under sub20 paragraphs (B), (C), and (E), the assets in 

21 any trust established to provide compensa22 tion for asbestos claims (as defined in sec23 tion 3 of the Fairness in Asbestos Injury 

24 Resolution Act of 2005) shall be trans25 ferred to the Fund not later than 6 


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1 months after the date of enactment of the 

2 Fairness in Asbestos Injury Resolution Act 

3 of 2005 or 30 days following funding of a 

4 trust established under a reorganization 

5 plan subject to section 202(c) of that Act. 

6 Except as provided under subparagraph 

7 (B), the Administrator of the Fund shall 

8 accept such assets and utilize them for any 

9 purposes of the Fund under section 221 of 

10 such Act, including the payment of claims 

11 for awards under such Act to beneficiaries 

12 of the trust from which the assets were 

13 transferred. 

14 ‘‘(ii) Notwithstanding any other provi15 sion of Federal or State law, no liability of 

16 any kind may be imposed on a trustee of 

17 a trust for transferring assets to the Fund 

18 in accordance with clause (i). 

19 ‘‘(B) AUTHORITY TO REFUSE ASSETS.— 

20 The Administrator of the Fund may refuse to 

21 accept any asset that the Administrator deter22 mines may create liability for the Fund in ex23 cess of the value of the asset. 

24 ‘‘(C) ALLOCATION OF TRUST ASSETS.—If 

25 a trust under subparagraph (A) has beneVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00236 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 ficiaries with claims that are not asbestos 

2 claims, the assets transferred to the Fund 

3 under subparagraph (A) shall not include assets 

4 allocable to such beneficiaries. The trustees of 

5 any such trust shall determine the amount of 

6 such trust assets to be reserved for the con7 tinuing operation of the trust in processing and 

8 paying claims that are not asbestos claims. The 

9 trustees shall demonstrate to the satisfaction of 

10 the Administrator, or by clear and convincing 

11 evidence in a proceeding brought before the 

12 United States District Court for the District of 

13 Columbia in accordance with paragraph (4), 

14 that the amount reserved is properly allocable 

15 to claims other than asbestos claims. 

16 ‘‘(D) SALE OF FUND ASSETS.—The invest17 ment requirements under section 222 of the 

18 Fairness in Asbestos Injury Resolution Act of 

19 2005 shall not be construed to require the Ad20 ministrator of the Fund to sell assets trans21 ferred to the Fund under subparagraph (A). 

22 ‘‘(E) LIQUIDATED CLAIMS.—Except as 

23 specifically provided in this subparagraph, all 

24 asbestos claims against a trust are superseded 

25 and preempted as of the date of enactment of 


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1 the Fairness in Asbestos Injury Resolution Act 

2 of 2005, and a trust shall not make any pay3 ment relating to asbestos claims after that date. 

4 If, in the ordinary course and the normal and 

5 usual administration of the trust consistent 

6 with past practices, a trust had before the date 

7 of enactment of the Fairness in Asbestos Injury 

8 Resolution Act of 2005, made all determina9 tions necessary to entitle an individual claimant 

10 to a noncontingent cash payment from the 

11 trust, the trust shall (i) make any lump-sum 

12 cash payment due to that claimant, and (ii) 

13 make or provide for all remaining noncontin14 gent payments on any award being paid or 

15 scheduled to be paid on an installment basis, in 

16 each case only to the same extent that the trust 

17 would have made such cash payments in the or18 dinary course and consistent with past practices 

19 before enactment of that Act. A trust shall not 

20 make any payment in respect of any alleged 

21 contingent right to recover any greater amount 

22 than the trust had already paid, or had com23 pleted all determinations necessary to pay, to a 

24 claimant in cash in accordance with its ordinary 


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1 distribution procedures in effect as of June 1, 

2 2003. 

3 ‘‘(3) INJUNCTION.— 

4 ‘‘(A) IN GENERAL.—Any injunction issued 

5 as part of the formation of a trust described in 

6 paragraph (1) shall remain in full force and ef7 fect. No court, Federal or State, may enjoin the 

8 transfer of assets by a trust to the Fund in ac9 cordance with this subsection pending resolu10 tion of any litigation challenging such transfer 

11 or the validity of this subsection or of any pro12 vision of the Fairness in Asbestos Injury Reso13 lution Act of 2005, and an interlocutory order 

14 denying such relief shall not be subject to im15 mediate appeal under section 1291(a) of title 

16 28. 

17 ‘‘(B) AVAILABILITY OF FUND ASSETS.— 

18 Notwithstanding any other provision of law, 

19 once such a transfer has been made, the assets 

20 of the Fund shall be available to satisfy any 

21 final judgment entered in such an action and 

22 such transfer shall no longer be subject to any 

23 appeal or review— 

24 ‘‘(i) declaring that the transfer ef25 fected a taking of a right or property for 


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1 which an individual is constitutionally enti2 tled to just compensation; or 

3 ‘‘(ii) requiring the transfer back to a 

4 trust of any or all assets transferred by 

5 that trust to the Fund. 

6 ‘‘(4) JURISDICTION.—Solely for purposes of im7 plementing this subsection, personal jurisdiction over 

8 every covered trust, the trustees thereof, and any 

9 other necessary party, and exclusive subject matter 

10 jurisdiction over every question arising out of or re11 lated to this subsection, shall be vested in the United 

12 States District Court for the District of Columbia. 

13 Notwithstanding any other provision of law, includ14 ing section 1127 of this title, that court may make 

15 any order necessary and appropriate to facilitate 

16 prompt compliance with this subsection, including 

17 assuming jurisdiction over and modifying, to the ex18 tent necessary, any applicable confirmation order or 

19 other order with continuing and prospective applica20 tion to a covered trust. The court may also resolve 

21 any related challenge to the constitutionality of this 

22 subsection or of its application to any trust, trustee, 

23 or individual claimant. The Administrator of the 

24 Fund may bring an action seeking such an order or 

25 modification, under the standards of rule 60(b) of 


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1 the Federal Rules of Civil Procedure or otherwise, 

2 and shall be entitled to intervene as of right in any 

3 action brought by any other party seeking interpre4 tation, application, or invalidation of this subsection. 

5 Any order denying relief that would facilitate prompt 

6 compliance with the transfer provisions of this sub7 section shall be subject to immediate appeal under 

8 section 304 of the Fairness in Asbestos Injury Reso9 lution Act of 2005. Notwithstanding any other provi10 sion of this paragraph, for purposes of implementing 

11 the sunset provisions of section 402(f) of such Act 

12 which apply to asbestos trusts and the class action 

13 trust, the bankruptcy court or United States district 

14 court having jurisdiction over any such trust as of 

15 the date of enactment of such Act shall retain such 

16 jurisdiction.’’. 

17 (g) NO AVOIDANCE OF TRANSFER.—Section 546 of 

18 title 11, United States Code, is amended by adding at the 

19 end the following: 

20 ‘‘(h) Notwithstanding the rights and powers of a 

21 trustee under sections 544, 545, 547, 548, 549, and 550 

22 of this title, if a debtor is a participant (as that term is 

23 defined in section 3 of the Fairness in Asbestos Injury 

24 Resolution Act of 2005), the trustee may not avoid a 


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1 transfer made by the debtor under its payment obligations 

2 under section 202 or 203 of that Act.’’. 

3 (h) CONFIRMATION OF PLAN.—Section 1129(a) of 

4 title 11, United States Code, is amended by adding at the 

5 end the following: 

6 ‘‘(14) If the debtor is a participant (as that 

7 term is defined in section 3 of the Fairness in As8 bestos Injury Resolution Act of 2005), the plan pro9 vides for the continuation after its effective date of 

10 payment of all payment obligations under title II of 

11 that Act.’’. 

12 (i) EFFECT ON INSURANCE RECEIVERSHIP PRO13 CEEDINGS.— 

14 (1) LIEN.—In an insurance receivership pro15 ceeding involving a direct insurer, reinsurer or run16 off participant, there shall be a lien in favor of the 

17 Fund for the amount of any assessment and any 

18 such lien shall be given priority over all other claims 

19 against the participant in receivership, except for the 

20 expenses of administration of the receivership and 

21 the perfected claims of the secured creditors. Any 

22 State law that provides for priorities inconsistent 

23 with this provision is preempted by this Act. 

24 (2) PAYMENT OF ASSESSMENT.—Payment of 

25 any assessment required by this Act shall not be 


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1 subject to any automatic or judicially entered stay in 

2 any insurance receivership proceeding. This Act shall 

3 preempt any State law requiring that payments by 

4 a direct insurer, reinsurer or runoff participant in 

5 an insurance receivership proceeding be approved by 

6 a court, receiver or other person. Payments of as7 sessments by any direct insurer or reinsurer partici8 pant under this Act shall not be subject to the avoid9 ance powers of a receiver or a court in or relating 

10 to an insurance receivership proceeding. 

11 (j) STANDING IN BANKRUPTCY PROCEEDINGS.—The 

12 Administrator shall have standing in any bankruptcy case 

13 involving a debtor participant. No bankruptcy court may 

14 require the Administrator to return property seized to sat15 isfy obligations to the Fund. 

16 SEC. 403. EFFECT ON OTHER LAWS AND EXISTING CLAIMS. 

17 (a) EFFECT ON FEDERAL AND STATE LAW.—The 

18 provisions of this Act shall supersede any Federal or State 

19 law insofar as such law may relate to any asbestos claim, 

20 including any claim described under subsection (e)(2). 

21 (b) EFFECT ON SILICA CLAIMS.— 

22 (1) IN GENERAL.— 

23 (A) RULE OF CONSTRUCTION.—Nothing in 

24 this Act shall be construed to preempt, bar, or 

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1 tributable to exposure to silica as to which the 

2 plaintiff— 

3 (i) pleads with particularity and es4 tablishes by a preponderance of evidence 

5 either that— 

6 (I) no claim has been asserted or 

7 filed by or with respect to the exposed 

8 person in any forum for any asbestos9 related condition and the exposed per10 son (or another claiming on behalf of 

11 or through the exposed person) is not 

12 eligible for any monetary award under 

13 this Act; or 

14 (II)(aa) the exposed person suf15 fers or has suffered a functional im16 pairment that was caused by exposure 

17 to silica; and 

18 (bb) asbestos exposure was not a 

19 substantial contributing factor to such 

20 functional impairment; and 

21 (ii) satisfies the requirements of para22 graph (2) . 

23 (B) PREEMPTION.—Claims attributable to 

24 exposure to silica that fail to meet the requireVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00244 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 ments of subparagraph (A) shall be preempted 

2 by this Act. 

3 (2) REQUIRED EVIDENCE.— 

4 (A) IN GENERAL.—In any claim to which 

5 paragraph (1) applies, the initial pleading (or, 

6 for claims pending on the date of enactment of 

7 this Act, an amended pleading to be filed within 

8 60 days after such date, but not later than 60 

9 days before trial, shall plead with particularity 

10 the elements of subparagraph (A)(i)(I) or (II) 

11 and shall be accompanied by the information 

12 described under subparagraph (B)(i) through 

13 (iv). 

14 (B) PLEADINGS.—If the claim pleads the 

15 elements of paragraph (1)(A)(i)(II) and by the 

16 information described under clauses (i) through 

17 (iv) of this subparagraph if the claim pleads the 

18 elements of paragraph (1)(A)(i)(I)— 

19 (i) admissible evidence, including at a 

20 minimum, a B-reader’s report, the under21 lying x-ray film and such other evidence 

22 showing that the claim may be maintained 

23 and is not preempted under paragraph (1); 

24 (ii) notice of any previous lawsuit or 

25 claim for benefits in which the exposed 


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1 person, or another claiming on behalf of or 

2 through the injured person, asserted an in3 jury or disability based wholly or in part 

4 on exposure to asbestos; 

5 (iii) if known by the plaintiff after 

6 reasonable inquiry by the plaintiff or his 

7 representative, the history of the exposed 

8 person’s exposure, if any, to asbestos; and 

9 (iv) copies of all medical and labora10 tory reports pertaining to the exposed per11 son that refer to asbestos or asbestos expo12 sure. 

13 (c) SUPERSEDING PROVISIONS.— 

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

15 paragraph (3), any agreement, understanding, or 

16 undertaking by any person or affiliated group with 

17 respect to the treatment of any asbestos claim that 

18 requires future performance by any party, insurer of 

19 such party, settlement administrator, or escrow 

20 agent shall be superseded in its entirety by this Act. 

21 (2) NO FORCE OR EFFECT.—Except as pro22 vided under paragraph (3), any such agreement, un23 derstanding, or undertaking by any such person or 

24 affiliated group shall be of no force or effect, and no 

25 person shall have any rights or claims with respect 


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1 to any such agreement, understanding, or under2 taking. 

3 (3) EXCEPTION.— 

4 (A) IN GENERAL.—Except as provided in 

5 section 202(f), nothing in this Act shall abro6 gate a binding and legally enforceable written 

7 settlement agreement between any defendant 

8 participant or its insurer and a specific named 

9 plaintiff with respect to the settlement of an as10 bestos claim of the plaintiff if— 

11 (i) before the date of enactment of 

12 this Act, the settlement agreement was ex13 ecuted directly by the settling defendant or 

14 the settling insurer and the individual 

15 plaintiff, or on behalf of the plaintiff where 

16 the plaintiff is incapacitated and the settle17 ment agreement is signed by an authorized 

18 legal representative; 

19 (ii) the settlement agreement contains 

20 an express obligation by the settling de21 fendant or settling insurer to make a fu22 ture direct monetary payment or payments 

23 in a fixed amount or amounts to the indi24 vidual plaintiff; and 


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1 (iii) within 30 days after the date of 

2 enactment of this Act, or such shorter time 

3 period specified in the settlement agree4 ment, all conditions to payment under the 

5 settlement agreement have been fulfilled, 

6 so that the only remaining performance 

7 due under the settlement agreement is the 

8 payment or payments by the settling de9 fendant or the settling insurer. 

10 (B) BANKRUPTCY-RELATED AGREE11 MENTS.—The exception set forth in this para12 graph shall not apply to any bankruptcy-related 

13 agreement. 

14 (C) COLLATERAL SOURCE.—Any settle15 ment payment under this section is a collateral 

16 source if the plaintiff seeks recovery from the 

17 Fund. 

18 (D) ABROGATION.—Nothing in subpara19 graph (A) shall abrogate a settlement agree20 ment otherwise satisfying the requirements of 

21 that subparagraph if such settlement agreement 

22 expressly anticipates the enactment of this Act 

23 and provides for the effects of this Act. 

24 (E) HEALTH CARE INSURANCE OR EX25 PENSES SETTLEMENTS.—Nothing in this Act 


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1 shall abrogate or terminate an otherwise fully 

2 enforceable settlement agreement which was ex3 ecuted before the date of enactment of this Act 

4 directly by the settling defendant or the settling 

5 insurer and a specific named plaintiff to pay 

6 the health care insurance or health care ex7 penses of the plaintiff. 

8 (d) EXCLUSIVE REMEDY.— 

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

10 paragraph (2), the remedies provided under this Act 

11 shall be the exclusive remedy for any asbestos claim, 

12 including any claim described in subsection (e)(2), 

13 under any Federal or State law. 

14 (2) CIVIL ACTIONS AT TRIAL.— 

15 (A) IN GENERAL.—This Act shall not 

16 apply to any asbestos claim that— 

17 (i) is a civil action filed in a Federal 

18 or State court (not including a filing in a 

19 bankruptcy court); 

20 (ii) is not part of a consolidation of 

21 actions or a class action; and 

22 (iii) on the date of enactment of this 

23 Act— 

24 (I) in the case of a civil action 

25 which includes a jury trial, is before 


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1 the jury after its impanelling and 

2 commencement of presentation of evi3 dence, but before its deliberations; 

4 (II) in the case of a civil action 

5 which includes a trial in which a judge 

6 is the trier of fact, is at the presen7 tation of evidence at trial; or 

8 (III) a verdict, final order, or 

9 final judgment has been entered by a 

10 trial court. 

11 (B) NONAPPLICABILITY.—This Act shall 

12 not apply to a civil action described under sub13 paragraph (A) throughout the final disposition 

14 of the action. 

15 (e) BAR ON ASBESTOS CLAIMS.— 

16 (1) IN GENERAL.—No asbestos claim (including 

17 any claim described in paragraph (2)) may be pur18 sued, and no pending asbestos claim may be main19 tained, in any Federal or State court, except as pro20 vided under subsection (d)(2). 

21 (2) CERTAIN SPECIFIED CLAIMS.— 

22 (A) IN GENERAL.—Subject to section 404 

23 (d) and (e)(3) of this Act, no claim may be 

24 brought or pursued in any Federal or State 

25 court or insurance receivership proceeding— 


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1 (i) relating to any default, confessed 

2 or stipulated judgment on an asbestos 

3 claim if the judgment debtor expressly 

4 agreed, in writing or otherwise, not to con5 test the entry of judgment against it and 

6 the plaintiff expressly agreed, in writing or 

7 otherwise, to seek satisfaction of the judg8 ment only against insurers or in bank9 ruptcy; 

10 (ii) relating to the defense, investiga11 tion, handling, litigation, settlement, or 

12 payment of any asbestos claim by any par13 ticipant, including claims for bad faith or 

14 unfair or deceptive claims handling or 

15 breach of any duties of good faith; or 

16 (iii) arising out of or relating to the 

17 asbestos-related injury of any individual 

18 and— 

19 (I) asserting any conspiracy, con20 cert of action, aiding or abetting, act, 

21 conduct, statement, misstatement, un22 dertaking, publication, omission, or 

23 failure to detect, speak, disclose, pub24 lish, or warn relating to the presence 

25 or health effects of asbestos or the 


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1 use, sale, distribution, manufacture, 

2 production, development, inspection, 

3 advertising, marketing, or installation 

4 of asbestos; or 

5 (II) asserting any conspiracy, 

6 act, conduct, statement, omission, or 

7 failure to detect, disclose, or warn re8 lating to the presence or health effects 

9 of asbestos or the use, sale, distribu10 tion, manufacture, production, devel11 opment, inspection, advertising, mar12 keting, or installation of asbestos, as13 serted as or in a direct action against 

14 an insurer or reinsurer based upon 

15 any theory, statutory, contract, tort, 

16 or otherwise; or 

17 (iv) by any third party, and premised 

18 on any theory, allegation, or cause of ac19 tion, for reimbursement of healthcare costs 

20 allegedly associated with the use of or ex21 posure to asbestos, whether such claim is 

22 asserted directly, indirectly or derivatively. 

23 (B) EXCEPTIONS.—Subparagraph (A) (ii) 

24 and (iii) shall not apply to claims against par25 ticipants by persons— 


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1 (i) with whom the participant is in 

2 privity of contract; 

3 (ii) who have received an assignment 

4 of insurance rights not otherwise voided by 

5 this Act; or 

6 (iii) who are beneficiaries covered by 

7 the express terms of a contract with that 

8 participant. 

9 (3) PREEMPTION.—Any action asserting an as10 bestos claim (including a claim described in para11 graph (2)) in any Federal or State court is pre12 empted by this Act, except as provided under sub13 section (d)(2). 

14 (4) DISMISSAL.—Except as provided under sub15 section (d)(2), no judgment other than a judgment 

16 of dismissal may be entered in any such action, in17 cluding an action pending on appeal, or on petition 

18 or motion for discretionary review, on or after the 

19 date of enactment of this Act. A court may dismiss 

20 any such action on its motion. If the court denies 

21 the motion to dismiss, it shall stay further pro22 ceedings until final disposition of any appeal taken 

23 under this Act. 

24 (5) REMOVAL.— 


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1 (A) IN GENERAL.—If an action in any 

2 State court under paragraph (3) is preempted, 

3 barred, or otherwise precluded under this Act, 

4 and not dismissed, or if an order entered after 

5 the date of enactment of this Act purporting to 

6 enter judgment or deny review is not rescinded 

7 and replaced with an order of dismissal within 

8 30 days after the filing of a motion by any 

9 party to the action advising the court of the 

10 provisions of this Act, any party may remove 

11 the case to the district court of the United 

12 States for the district in which such action is 

13 pending. 

14 (B) TIME LIMITS.—For actions originally 

15 filed after the date of enactment of this Act, the 

16 notice of removal shall be filed within the time 

17 limits specified in section 1441(b) of title 28, 

18 United States Code. 

19 (C) PROCEDURES.—The procedures for re20 moval and proceedings after removal shall be in 

21 accordance with sections 1446 through 1450 of 

22 title 28, United States Code, except as may be 

23 necessary to accommodate removal of any ac24 tions pending (including on appeal) on the date 

25 of enactment of this Act. 


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1 (D) REVIEW OF REMAND ORDERS.— 

2 (i) IN GENERAL.—Section 1447 of 

3 title 28, United States Code, shall apply to 

4 any removal of a case under this section, 

5 except that notwithstanding subsection (d) 

6 of that section, a court of appeals may ac7 cept an appeal from an order of a district 

8 court granting or denying a motion to re9 mand an action to the State court from 

10 which it was removed if application is 

11 made to the court of appeals not less than 

12 7 days after entry of the order. 

13 (ii) TIME PERIOD FOR JUDGMENT.—If 

14 the court of appeals accepts an appeal 

15 under clause (i), the court shall complete 

16 all action on such appeal, including ren17 dering judgment, not later than 60 days 

18 after the date on which such appeal was 

19 filed, unless an extension is granted under 

20 clause (iii). 

21 (iii) EXTENSION OF TIME PERIOD.— 

22 The court of appeals may grant an exten23 sion of the 60-day period described in 

24 clause (ii) if— 


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1 (I) all parties to the proceeding 

2 agree to such extension, for any pe3 riod of time; or 

4 (II) such extension is for good 

5 cause shown and in the interests of 

6 justice, for a period not to exceed 10 

7 days. 

8 (iv) DENIAL OF APPEAL.—If a final 

9 judgment on the appeal under clause (i) is 

10 not issued before the end of the period de11 scribed in clause (ii), including any exten12 sion under clause (iii), the appeal shall be 

13 denied. 

14 (E) JURISDICTION.—The jurisdiction of 

15 the district court shall be limited to— 

16 (i) determining whether removal was 

17 proper; and 

18 (ii) determining, based on the evi19 dentiary record, whether the claim pre20 sented is preempted, barred, or otherwise 

21 precluded under this Act. 

22 (6) CREDITS.— 

23 (A) IN GENERAL.—If, notwithstanding the 

24 express intent of Congress stated in this sec25 tion, any court finally determines for any reaVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00256 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 son that an asbestos claim is not barred under 

2 this subsection and is not subject to the exclu3 sive remedy or preemption provisions of this 

4 section, then any participant required to satisfy 

5 a final judgment executed with respect to any 

6 such claim may elect to receive a credit against 

7 any assessment owed to the Fund equal to the 

8 amount of the payment made with respect to 

9 such executed judgment. 

10 (B) REQUIREMENTS.—The Administrator 

11 shall require participants seeking credit under 

12 this paragraph to demonstrate that the partici13 pant— 

14 (i) timely pursued all available rem15 edies, including remedies available under 

16 this paragraph to obtain dismissal of the 

17 claim; and 

18 (ii) notified the Administrator at least 

19 20 days before the expiration of any period 

20 within which to appeal the denial of a mo21 tion to dismiss based on this section. 

22 (C) INFORMATION.—The Administrator 

23 may require a participant seeking credit under 

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1 tion as is necessary and appropriate to establish 

2 eligibility for, and the amount of, the credit. 

3 (D) INTERVENTION.—The Administrator 

4 may intervene in any action in which a credit 

5 may be due under this paragraph. 

6 SEC. 404. EFFECT ON INSURANCE AND REINSURANCE CON7 TRACTS. 

8 (a) EROSION OF INSURANCE COVERAGE LIMITS.— 

9 (1) DEFINITIONS.—In this section, the fol10 lowing definitions shall apply: 

11 (A) DEEMED EROSION AMOUNT.—The 

12 term ‘‘deemed erosion amount’’ means the 

13 amount of erosion deemed to occur at enact14 ment under paragraph (2). 

15 (B) EARLY SUNSET.—The term ‘‘early 

16 sunset’’ means an event causing termination of 

17 the program under section 405(f) which relieves 

18 the insurer participants of paying some portion 

19 of the aggregate payment level of 

20 $46,025,000,000 required under section 

21 212(a)(2)(A). 

22 (C) EARNED EROSION AMOUNT.—The 

23 term ‘‘earned erosion amount’’ means, in the 

24 event of any early sunset under section 405(f), 

25 the percentage, as set forth in the following 


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1 schedule, depending on the year in which the 

2 defendant participants’ funding obligations end, 

3 of those amounts which, at the time of the early 

4 sunset, a defendant participant has paid to the 

5 fund and remains obligated to pay into the 

6 fund. 

Year After Enactment In Which 

Defendant Participant’s Applicable 

Funding Obligation Ends: Percentage: 

2 ............................................................................................... 67.06

3 ............................................................................................... 86.72

4 ............................................................................................... 96.55

5 ............................................................................................... 102.45

6 ............................................................................................... 90.12

7 ............................................................................................... 81.32

8 ............................................................................................... 74.71

9 ............................................................................................... 69.58

10 ............................................................................................. 65.47

11 ............................................................................................. 62.11

12 ............................................................................................. 59.31

13 ............................................................................................. 56.94

14 ............................................................................................. 54.90

15 ............................................................................................. 53.14

16 ............................................................................................. 51.60

17 ............................................................................................. 50.24

18 ............................................................................................. 49.03

19 ............................................................................................. 47.95

20 ............................................................................................. 46.98

21 ............................................................................................. 46.10

22 ............................................................................................. 45.30

23 ............................................................................................. 44.57

24 ............................................................................................. 43.90

25 ............................................................................................. 43.28

26 ............................................................................................. 42.71

27 ............................................................................................. 42.18

28 ............................................................................................. 40.82

29 ............................................................................................. 39.42

7 (D) REMAINING AGGREGATE PRODUCTS

8 LIMITS.—The term ‘‘remaining aggregate prod9 ucts limits’’ means aggregate limits that apply 

10 to insurance coverage granted under the ‘‘prod11 ucts hazard’’, ‘‘completed operations hazard’’, 


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1 or ‘‘Products—Completed Operations Liability’’ 

2 in any comprehensive general liability policy 

3 issued between calendar years 1940 and 1986 

4 to cover injury which occurs in any State, as re5 duced by— 

6 (i) any existing impairment of such 

7 aggregate limits as of the date of enact8 ment of this Act; and 

9 (ii) the resolution of claims for reim10 bursement or coverage of liability or paid 

11 or incurred loss for which notice was pro12 vided to the insurer before the date of en13 actment of this Act. 

14 (E) SCHEDULED PAYMENT AMOUNTS.— 

15 The term ‘‘scheduled payment amounts’’ means 

16 the future payment obligation to the Fund 

17 under this Act from a defendant participant in 

18 the amount established under sections 203 and 

19 204. 

20 (F) UNEARNED EROSION AMOUNT.—The 

21 term ‘‘unearned erosion amount’’ means, in the 

22 event of any early sunset under section 405(f), 

23 the difference between the deemed erosion 

24 amount and the earned erosion amount. 

25 (2) QUANTUM AND TIMING OF EROSION.— 


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1 (A) EROSION UPON ENACTMENT.—The 

2 collective payment obligations to the Fund of 

3 the insurer and reinsurer participants as as4 sessed by the Administrator shall be deemed as 

5 of the date of enactment of this Act to erode re6 maining aggregate products limits available to a 

7 defendant participant only in an amount of 

8 38.1 percent of each defendant participant’s 

9 scheduled payment amount. 

10 (B) NO ASSERTION OF CLAIM.—No insurer 

11 or reinsurer may assert any claim against a de12 fendant participant or captive insurer for insur13 ance, reinsurance, payment of a deductible, or 

14 retrospective premium adjustment arising out 

15 of that insurer’s or reinsurer’s payments to the 

16 Fund or the erosion deemed to occur under this 

17 section. 

18 (C) POLICIES WITHOUT CERTAIN LIMITS

19 OR WITH EXCLUSION.—Except as provided 

20 under subparagraph (E), nothing in this section 

21 shall require or permit the erosion of any insur22 ance policy or limit that does not contain an ag23 gregate products limit, or that contains an as24 bestos exclusion. 


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1 (D) TREATMENT OF CONSOLIDATION

2 ELECTION.—If an affiliated group elects con3 solidation as provided in section 204(f), the 

4 total erosion of limits for the affiliated group 

5 under paragraph (2)(A) shall not exceed 59.64 

6 percent of the scheduled payment amount of 

7 the single payment obligation for the entire af8 filiated group. The total erosion of limits for 

9 any individual defendant participant in the af10 filiated group shall not exceed its individual 

11 share of 59.64 percent of the affiliated group’s 

12 scheduled payment amount, as measured by the 

13 individual defendant participant’s percentage 

14 share of the affiliated group’s prior asbestos ex15 penditures. 

16 (E) RULE OF CONSTRUCTION.—Notwith17 standing any other provision of this section, 

18 nothing in this Act shall be deemed to erode re19 maining aggregate products limits of a defend20 ant participant that can demonstrate by a 

21 reponderance of the evidence that 75 percent of 

22 its prior asbestos expenditures were made in de23 fense or satisfaction of asbestos claims alleging 

24 bodily injury arising exclusively from the expo25 sure to asbestos at premises owned, rented, or 


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1 controlled by the defendant participant (a 

2 ‘‘premises defendant’’). In calculating such per3 centage, where expenditures were made in de4 fense or satisfaction of asbestos claims alleging 

5 bodily injury due to exposure to the defendant 

6 participant’s products and to asbestos at prem7 ises owned, rented, or controlled by the defend8 ant participant, half of such expenditures shall 

9 be deemed to be for such premises exposures. If 

10 a defendant participant establishes itself as a 

11 premises defendant, 75 percent of the payments 

12 by such defendant participant shall erode cov13 erage limits, if any, applicable to premises li14 abilities under applicable law. 

15 (3) METHOD OF EROSION.— 

16 (A) ALLOCATION.—The amount of erosion 

17 allocated to each defendant participant shall be 

18 allocated among periods in which policies with 

19 remaining aggregate product limits are avail20 able to that defendant participant pro rata by 

21 policy period, in ascending order by attachment 

22 point. 

23 (B) OTHER EROSION METHODS.— 

24 (i) IN GENERAL.—Notwithstanding 

25 subparagraph (A), the method of erosion 


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1 of any remaining aggregate products limits 

2 which are subject to— 

3 (I) a coverage-in-place or settle4 ment agreement between a defendant 

5 participant and 1 or more insurance 

6 participants as of the date of enact7 ment; or 

8 (II) a final and nonappealable 

9 judgment as of the date of enactment 

10 or resulting from a claim for coverage 

11 or reimbursement pending as of such 

12 date, shall be as specified in such 

13 agreement or judgment with regard to 

14 erosion applicable to such insurance 

15 participants’ policies. 

16 (ii) REMAINING LIMITS.—To the ex17 tent that a final nonappealable judgment 

18 or settlement agreement to which an in19 surer participant and a defendant partici20 pant are parties in effect as of the date of 

21 enactment of this Act extinguished a de22 fendant participant’s right to seek coverage 

23 for asbestos claims under an insurer par24 ticipant’s policies, any remaining limits in 

25 such policies shall not be considered to be 


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1 remaining aggregate products limits under 

2 subsection (a)(1)(A). 

3 (4) RESTORATION OF AGGREGATE PRODUCTS

4 LIMITS UPON EARLY SUNSET.— 

5 (A) RESTORATION.—In the event of an 

6 early sunset, any unearned erosion amount will 

7 be deemed restored as aggregate products limits 

8 available to a defendant participant as of the 

9 date of enactment. 

10 (B) METHOD OF RESTORATION.—The un11 earned erosion amount will be deemed restored 

12 to each defendant participant’s policies in such 

13 a manner that the last limits that were deemed 

14 eroded at enactment under this subsection are 

15 deemed to be the first limits restored upon 

16 early sunset. 

17 (C) TOLLING OF COVERAGE CLAIMS.—In 

18 the event of an early sunset, the applicable stat19 ute of limitations and contractual provisions for 

20 the filing of claims under any insurance policy 

21 with restored aggregate products limits shall be 

22 deemed tolled after the date of enactment 

23 through the date 6 months after the date of 

24 early sunset. 


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1 (5) PAYMENTS BY DEFENDANT PARTICIPANT.— 

2 Payments made by a defendant participant shall be 

3 deemed to erode, exhaust, or otherwise satisfy appli4 cable self-insured retentions, deductibles, retrospec5 tively rated premiums, and limits issued by non6 participating insolvent or captive insurance compa7 nies. Reduction of remaining aggregate limits under 

8 this subsection shall not limit the right of a defend9 ant participant to collect from any insurer not a par10 ticipant. 

11 (6) EFFECT ON OTHER INSURANCE CLAIMS.— 

12 Other than as specified in this subsection, this Act 

13 does not alter, change, modify, or affect insurance 

14 for claims other than asbestos claims. 

15 (b) DISPUTE RESOLUTION PROCEDURE.— 

16 (1) ARBITRATION.—The parties to a dispute re17 garding the erosion of insurance coverage limits 

18 under this section may agree in writing to settle 

19 such dispute by arbitration. Any such provision or 

20 agreement shall be valid, irrevocable, and enforce21 able, except for any grounds that exist at law or in 

22 equity for revocation of a contract. 

23 (2) TITLE 9, UNITED STATES CODE.—Arbitra24 tion of such disputes, awards by arbitrators, and 

25 confirmation of awards shall be governed by title 9, 


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1 United States Code, to the extent such title is not 

2 inconsistent with this section. In any such arbitra3 tion proceeding, the erosion principles provided for 

4 under this section shall be binding on the arbitrator, 

5 unless the parties agree to the contrary. 

6 (3) FINAL AND BINDING AWARD.—An award by 

7 an arbitrator shall be final and binding between the 

8 parties to the arbitration, but shall have no force or 

9 effect on any other person. The parties to an arbi10 tration may agree that in the event a policy which 

11 is the subject matter of an award is subsequently de12 termined to be eroded in a manner different from 

13 the manner determined by the arbitration in a judg14 ment rendered by a court of competent jurisdiction 

15 from which no appeal can or has been taken, such 

16 arbitration award may be modified by any court of 

17 competent jurisdiction upon application by any party 

18 to the arbitration. Any such modification shall gov19 ern the rights and obligations between such parties 

20 after the date of such modification. 

21 (c) EFFECT ON NONPARTICIPANTS.— 

22 (1) IN GENERAL.—No insurance company or 

23 reinsurance company that is not a participant, other 

24 than a captive insurer, shall be entitled to claim that 

25 payments to the Fund erode, exhaust, or otherwise 


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1 limit the nonparticipant’s insurance or reinsurance 

2 obligations. 

3 (2) OTHER CLAIMS.—Nothing in this Act shall 

4 preclude a participant from pursuing any claim for 

5 insurance or reinsurance from any person that is not 

6 a participant other than a captive insurer. 

7 (d) FINITE RISK POLICIES NOT AFFECTED.— 

8 (1) IN GENERAL.—Notwithstanding any other 

9 provision of this Act, except subject to section 

10 212(a)(1)(D), this Act shall not alter, affect or im11 pair any rights or obligations of— 

12 (A) any party to an insurance contract 

13 that expressly provides coverage for govern14 mental charges or assessments imposed to re15 place insurance or reinsurance liabilities in ef16 fect on the date of enactment of this Act; or 

17 (B) subject to paragraph (2), any person 

18 with respect to any insurance or reinsurance 

19 purchased by a participant after December 31, 

20 1990, that expressly (but not necessarily exclu21 sively) provides coverage for asbestos liabilities, 

22 including those policies commonly referred to as 

23 ‘‘finite risk’’ policies. 

24 (2) LIMITATION.—No person may assert that 

25 any amounts paid to the Fund in accordance with 


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1 this Act are covered by any policy described under 

2 paragraph (1)(B) purchased by a defendant partici3 pant, unless such policy specifically provides cov4 erage for required payments to a Federal trust fund 

5 established by a Federal statute to resolve asbestos 

6 injury claims. 

7 (e) EFFECT ON CERTAIN INSURANCE AND REINSUR8 ANCE CLAIMS.— 

9 (1) NO COVERAGE FOR FUND ASSESSMENTS.— 

10 No participant or captive insurer may pursue an in11 surance or reinsurance claim against another partici12 pant or captive insurer for payments to the Fund re13 quired under this Act, except under a contract spe14 cifically providing insurance or reinsurance for re15 quired payments to a Federal trust fund established 

16 by a Federal statute to resolve asbestos injury 

17 claims or, where applicable, under finite risk policies 

18 under subsection (d). 

19 (2) CERTAIN INSURANCE ASSIGNMENTS VOID20 ED.—Any assignment of any rights to insurance cov21 erage for asbestos claims to any person who has as22 serted an asbestos claim before the date of enact23 ment of this Act, or to any trust, person, or other 

24 entity not part of an affiliated group as defined in 

25 section 201(1) of this Act established or appointed 


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1 for the purpose of paying asbestos claims which were 

2 asserted before such date of enactment, or by any 

3 Tier I defendant participant, before any sunset of 

4 this Act, shall be null and void. This subsection shall 

5 not void or affect in any way any assignments of 

6 rights to insurance coverage other than to asbestos 

7 claimants or to trusts, persons, or other entities not 

8 part of an affiliated group as defined in section 

9 201(1) of this Act established or appointed for the 

10 purpose of paying asbestos claims, or by Tier I de11 fendant participants. 

12 (3) INSURANCE CLAIMS PRESERVED.—Notwith13 standing any other provision of this Act, this Act 

14 shall not alter, affect, or impair any rights or obliga15 tions of any person with respect to any insurance or 

16 reinsurance for amounts that any person pays, has 

17 paid, or becomes legally obligated to pay in respect 

18 of asbestos or other claims, except to the extent 

19 that— 

20 (A) such person pays or becomes legally 

21 obligated to pay claims that are superseded by 

22 section 403; 

23 (B) any such rights or obligations of such 

24 person with respect to insurance or reinsurance 


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1 are prohibited by paragraph (1) or (2) of sub2 section (e); or 

3 (C) the limits of insurance otherwise avail4 able to such participant in respect of asbestos 

5 claims are deemed to be eroded under sub6 section (a). 

7 SEC. 405. ANNUAL REPORT OF THE ADMINISTRATOR AND 

8 SUNSET OF THE ACT. 

9 (a) IN GENERAL.—The Administrator shall submit 

10 an annual report to the Committee on the Judiciary of 

11 the Senate and the Committee on the Judiciary of the 

12 House of Representatives on the operation of the Asbestos 

13 Injury Claims Resolution Fund within 6 months after the 

14 close of each fiscal year. 

15 (b) CONTENTS OF REPORT.—The annual report sub16 mitted under this subsection shall include an analysis of— 

17 (1) the claims experience of the program during 

18 the most recent fiscal year, including— 

19 (A) the number of claims made to the Of20 fice and a description of the types of medical 

21 diagnoses and asbestos exposures underlying 

22 those claims; 

23 (B) the number of claims denied by the 

24 Office and a description of the types of medical 

25 diagnoses and asbestos exposures underlying 


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1 those claims, and a general description of the 

2 reasons for their denial; 

3 (C) a summary of the eligibility determina4 tions made by the Office under section 114; 

5 (D) a summary of the awards made from 

6 the Fund, including the amount of the awards; 

7 and 

8 (E) for each eligible condition, a statement 

9 of the percentage of asbestos claimants who 

10 filed claims during the prior calendar year and 

11 were determined to be eligible to receive com12 pensation under this Act, who have received the 

13 compensation to which such claimants are enti14 tled according to section 131; 

15 (2) the administrative performance of the pro16 gram, including— 

17 (A) the performance of the program in 

18 meeting the time limits prescribed by law and 

19 an analysis of the reasons for any systemic 

20 delays; 

21 (B) any backlogs of claims that may exist 

22 and an explanation of the reasons for such 

23 backlogs; 

24 (C) the costs to the Fund of administering 

25 the program; and 


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1 (D) any other significant factors bearing 

2 on the efficiency of the program; 

3 (3) the financial condition of the Fund, includ4 ing— 

5 (A) statements of the Fund’s revenues, ex6 penses, assets, and liabilities; 

7 (B) the identity of all participants, the 

8 funding allocations of each participant, and the 

9 total amounts of all payments to the Fund; 

10 (C) a list of all financial hardship or in11 equity adjustments applied for during the fiscal 

12 year, and the adjustments that were made dur13 ing the fiscal year; 

14 (D) a statement of the investments of the 

15 Fund; and 

16 (E) a statement of the borrowings of the 

17 Fund; 

18 (4) the financial prospects of the Fund, includ19 ing— 

20 (A) an estimate of the number and types 

21 of claims, the amount of awards, and the par22 ticipant payment obligations for the next fiscal 

23 year; 

24 (B) an analysis of the financial condition 

25 of the Fund, including an estimation of the 


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1 Fund’s ability to pay claims for the subsequent 

2 5 years in full as and when required, an evalua3 tion of the Fund’s ability to retire its existing 

4 debt and assume additional debt, and an eval5 uation of the Fund’s ability to satisfy other ob6 ligations under the program; and 

7 (C) a report on any changes in projections 

8 made in earlier annual reports or sunset anal9 yses regarding the Fund’s ability to meet its fi10 nancial obligations; 

11 (5) any recommendations from the Advisory 

12 Committee on Asbestos Disease Compensation and 

13 the Medical Advisory Committee of the Fund to im14 prove the diagnostic, exposure, and medical criteria 

15 so as to pay only those claimants whose injuries are 

16 caused by exposure to asbestos; 

17 (6) a summary of the results of audits con18 ducted under section 115; and 

19 (7) a summary of prosecutions under section 

20 1348 of title 18, United States Code (as added by 

21 this Act). 

22 (c) CLAIMS ANALYSIS.—If the Administrator con23 cludes, on the basis of the annual report submitted under 

24 this section, that the Fund is compensating claims for in25 juries that are not caused by exposure to asbestos and 


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1 compensating such claims may, currently or in the future, 

2 undermine the Fund’s ability to compensate persons with 

3 injuries that are caused by exposure to asbestos, the Ad4 ministrator shall include in the report an analysis of the 

5 reasons for the situation, a description of the range of rea6 sonable alternatives for responding to the situation, and 

7 a recommendation as to which alternative best serves the 

8 interest of claimants and the public. The report shall in9 clude a description of changes in the diagnostic, exposure, 

10 or medical criteria of section 121 that the Administrator 

11 believes may be necessary to protect the Fund from com12 pensating claims not caused by exposure to asbestos. 

13 (d) SHORTFALL ANALYSIS.— 

14 (1) IN GENERAL.— 

15 (A) ANALYSIS.—If the Administrator con16 cludes, on the basis of the information con17 tained in the annual report submitted under 

18 this section, that the Fund may not be able to 

19 pay claims as such claims become due at any 

20 time within the next 5 years, the Administrator 

21 shall include in the report an analysis of the 

22 reasons for the situation, an estimation of when 

23 the Fund will no longer be able to pay claims 

24 as such claims become due, a description of the 

25 range of reasonable alternatives for responding 


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1 to the situation, and a recommendation as to 

2 which alternative best serves the interest of 

3 claimants and the public. The report may in4 clude a description of changes in the diagnostic, 

5 exposure, or medical criteria of section 121 that 

6 the Administrator believes may be necessary to 

7 protect the Fund. 

8 (B) RANGE OF ALTERNATIVES.—The 

9 range of alternatives under subparagraph (A) 

10 may include— 

11 (i) triggering the termination of this 

12 Act under subsection (f) at any time after 

13 the date of enactment of this Act; and 

14 (ii) reform of the program set forth in 

15 titles I and II of this Act (including 

16 changes in the diagnostic, exposure, or 

17 medical criteria, changes in the enforce18 ment or application of those criteria, 

19 changes in the timing of payments, 

20 changes in contributions by defendant par21 ticipants, insurer participants (or both 

22 such participants), or changes in award 

23 values). 

24 (2) CONSIDERATIONS.—In formulating rec25 ommendations, the Administrator shall take into acVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00276 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 count the reasons for any shortfall, actual or pro2 jected, which may include— 

3 (A) financial factors, including return on 

4 investments, borrowing capacity, interest rates, 

5 ability to collect contributions, and other rel6 evant factors; 

7 (B) the operation of the Fund generally, 

8 including administration of the claims proc9 essing, the ability of the Administrator to col10 lect contributions from participants, potential 

11 problems of fraud, the adequacy of the criteria 

12 to rule out idiopathic mesothelioma, and inad13 equate flexibility to extend the timing of pay14 ments; 

15 (C) the appropriateness of the diagnostic, 

16 exposure, and medical criteria, including the 

17 adequacy of the criteria to rule out idiopathic 

18 mesothelioma; 

19 (D) the actual incidence of asbestos-related 

20 diseases, including mesothelioma, based on epi21 demiological studies and other relevant data; 

22 (E) compensation of diseases with alter23 native causes; and 

24 (F) other factors that the Administrator 

25 considers relevant. 


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1 (3) RECOMMENDATION OF TERMINATION.—Any 

2 recommendation of termination should include a 

3 plan for winding up the affairs of the Fund (and the 

4 program generally) within a defined period, includ5 ing paying in full all claims resolved at the time the 

6 report is prepared. Any plan under this paragraph 

7 shall provide for priority in payment to the claim8 ants with the most serious illnesses. 

9 (4) RESOLVED CLAIMS.—For purposes of this 

10 section, a claim shall be deemed resolved when the 

11 Administrator has determined the amount of the 

12 award due the claimant, and either the claimant has 

13 waived judicial review or the time for judicial review 

14 has expired. 

15 (e) RECOMMENDATIONS OF ADMINISTRATOR AND

16 COMMISSION.— 

17 (1) IN GENERAL.—If the Administrator rec18 ommends changes to this Act under subsection (c), 

19 the recommendations and accompanying analysis 

20 shall be referred to a special commission consisting 

21 of the Attorney General, the Secretary of Labor, the 

22 Secretary of Health and Human Services, the Sec23 retary of the Treasury, and the Secretary of Com24 merce, or their designees. The Commission shall 

25 hold expedited public hearings on the AdministraVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00278 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 tor’s alternatives and recommendations and then 

2 make its own recommendations for reform of the 

3 program set forth in titles I and II of this Act. 

4 Within 180 days after receiving the Administrator’s 

5 recommendations, the Commission shall transmit its 

6 own recommendations to the Congress in the same 

7 manner as set forth in subsection (a). 

8 (2) REFERRAL.—If the Administrator rec9 ommends changes to, or termination of, this Act 

10 under subsection (d), the recommendations and ac11 companying analysis shall be referred to the Com12 mission. The Commission shall hold expedited public 

13 hearings on the Administrator’s alternatives and rec14 ommendations and then make its own recommenda15 tions for reform of the program set forth in titles I 

16 and II of this Act. Within 180 days after receiving 

17 the Administrator’s recommendations, the Commis18 sion shall transmit its own recommendations to Con19 gress in the same manner as set forth in subsection 

20 (a). 

21 (f) SUNSET OF ACT.— 

22 (1) IN GENERAL.— 

23 (A) TERMINATION.—Subject to paragraph 

24 (4), titles I (except subtitle A) and II and sec25 tions 403 and 404(e)(2) shall terminate as proVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00279 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 vided under paragraph (2), if the Adminis2 trator— 

3 (i) has begun the processing of claims; 

4 and 

5 (ii) as part of the review conducted to 

6 prepare an annual report under this sec7 tion, determines that if any additional 

8 claims are resolved, the Fund will not have 

9 sufficient resources when needed to pay 

10 100 percent of all resolved claims while 

11 also meeting all other obligations of the 

12 Fund under this Act, including the pay13 ment of— 

14 (I) debt repayment obligations; 

15 and 

16 (II) remaining obligations to the 

17 asbestos trust of a debtor and the 

18 class action trust. 

19 (B) REMAINING OBLIGATIONS.—For pur20 poses of subparagraph (A)(ii), the remaining 

21 obligations to the asbestos trust of the debtor 

22 and the class action trust shall be determined 

23 by the Administrator by assuming that, instead 

24 of a lump-sum payment, such trust had trans25 ferred its assets to the Fund on an annual 


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1 basis, taking into consideration relevant factors, 

2 including the most recent projections made by 

3 the trust’s actuary before the date of enactment 

4 of this Act of the amount and timing of future 

5 claim payments and administrative and oper6 ating expenses. 

7 (2) EFFECTIVE DATE OF TERMINATION.—A 

8 termination under paragraph (1) shall take effect 

9 180 days after the date of a determination of the 

10 Administrator under paragraph (1) and shall apply 

11 to all asbestos claims that have not been resolved by 

12 the Fund as of the date of the determination. 

13 (3) RESOLVED CLAIMS.—If a termination takes 

14 effect under this subsection, all resolved claims shall 

15 be paid in full by the Fund. 

16 (4) EXTINGUISHED CLAIMS.—A claim that is 

17 extinguished under the statute of limitations provi18 sions in section 113(b) is not revived at the time of 

19 sunset under this subsection. 

20 (5) CONTINUED FUNDING.—If a termination 

21 takes effect under this subsection, participants will 

22 still be required to make payments as provided 

23 under subtitles A and B of title II. If the full 

24 amount of payments required by title II is not nec25 essary for the Fund to pay claims that have been reVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00281 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 solved as of the date of termination, pay the Fund’s 

2 debt and obligations to the asbestos trusts and class 

3 action trust, and support the Fund’s continued oper4 ation as needed to pay such claims, debt, and obliga5 tions, the Administrator may reduce such payments. 

6 Any such reductions shall be allocated among par7 ticipants in approximately the same proportion as 

8 the liability under subtitles A and B of title II. 

9 (6) SUNSET CLAIMS.— 

10 (A) DEFINITIONS.—In this paragraph— 

11 (i) the term ‘‘sunset claims’’ means 

12 claims filed with the Fund, but not yet re13 solved, when this Act has terminated; and 

14 (ii) the term ‘‘sunset claimants’’ 

15 means persons asserting sunset claims. 

16 (B) IN GENERAL.—If a termination takes 

17 effect under this subsection, the applicable stat18 ute of limitations for the filing of sunset claims 

19 under subsection (g) shall be tolled for any past 

20 or pending sunset claimants while such claim21 ants were pursuing claims filed under this Act. 

22 For those claimants who decide to pursue a 

23 sunset claim in accordance with subsection (g), 

24 the applicable statute of limitations shall apply, 

25 except that claimants who filed a claim against 


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1 the Fund under this Act before the date of ter2 mination shall have 2 years after the date of 

3 termination to file a sunset claim in accordance 

4 with subsection (g). 

5 (7) ASBESTOS TRUSTS AND CLASS ACTION

6 TRUST.—On and after the date of termination under 

7 this subsection, the trust distribution program of 

8 any asbestos trust and the class action trust shall be 

9 replaced with the medical criteria requirements of 

10 section 121. 

11 (8) PAYMENT TO ASBESTOS TRUSTS AND CLASS

12 ACTION TRUST.—The amounts determined under 

13 paragraph (1)(B) for payment to the asbestos trusts 

14 and the class action trust shall be transferred to the 

15 respective asbestos trusts of the debtor and the class 

16 action trust within 90 days. 

17 (g) NATURE OF CLAIM AFTER SUNSET.— 

18 (1) IN GENERAL.— 

19 (A) RELIEF.—On and after the date of 

20 termination under subsection (f), any individual 

21 with an asbestos claim who has not previously 

22 had a claim resolved by the Fund, may in a 

23 civil action obtain relief in damages subject to 

24 the terms and conditions under this subsection 

25 and paragraph (6) of subsection (f). 


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1 (B) RESOLVED CLAIMS.—An individual 

2 who has had a claim resolved by the Fund may 

3 not pursue a court action, except that an indi4 vidual who received an award for a nonmalig5 nant disease (Levels I through V) from the 

6 Fund may assert a claim for a subsequent or 

7 progressive disease under this subsection, unless 

8 the disease was diagnosed or the claimant had 

9 discovered facts that would have led a reason10 able person to obtain such a diagnosis before 

11 the date on which the previous claim against 

12 the Fund was disposed. 

13 (C) MESOTHELIOMA CLAIM.—An indi14 vidual who received an award for a nonmalig15 nant or malignant disease (except mesothe16 lioma) (Levels I through VIII) from the Fund 

17 may assert a claim for mesothelioma under this 

18 subsection, unless the mesothelioma was diag19 nosed or the claimant had discovered facts that 

20 would have led a reasonable person to obtain 

21 such a diagnosis before the date on which the 

22 nonmalignant or other malignant claim was dis23 posed. 

24 (2) EXCLUSIVE REMEDY.—As of the effective 

25 date of a termination of this Act under subsection 


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1 (f), an action under paragraph (1) shall be the ex2 clusive remedy for any asbestos claim that might 

3 otherwise exist under Federal, State, or other law, 

4 regardless of whether such claim arose before or 

5 after the date of enactment of this Act or of the ter6 mination of this Act, except that claims against the 

7 Fund that have been resolved before the date of the 

8 termination determination under subsection (f) may 

9 be paid by the Fund. 

10 (3) VENUE.— 

11 (A) IN GENERAL.—Actions under para12 graph (1) may be brought in— 

13 (i) any Federal district court; 

14 (ii) any State court in the State where 

15 the claimant resides; or 

16 (iii) any State court in a State where 

17 the asbestos exposure occurred. 

18 (B) DEFENDANTS NOT FOUND.—If any 

19 defendant cannot be found in the State de20 scribed in clause (ii) or (iii) of subparagraph 

21 (A), the claim may be pursued only against that 

22 defendant in the Federal district court or the 

23 State court located within any State in which 

24 the defendant may be found. 


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1 (C) DETERMINATION OF MOST APPRO2 PRIATE FORUM.—If a person alleges that the 

3 asbestos exposure occurred in more than one 

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

5 determine which State and county (or Federal 

6 district) is the most appropriate forum for the 

7 claim. If the court determines that another 

8 forum would be the most appropriate forum for 

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

10 otherwise applicable statute of limitations shall 

11 be tolled beginning on the date the claim was 

12 filed and ending on the date the claim is dis13 missed under this subparagraph. 

14 (D) STATE VENUE REQUIREMENTS.— 

15 Nothing in this paragraph shall preempt or su16 persede any State’s law relating to venue re17 quirements within that State which are more 

18 restrictive. 

19 (4) CLASS ACTION TRUSTS.—Notwithstanding 

20 any other provision of this section— 

21 (A) after the assets of any class action 

22 trust have been transferred to the Fund in ac23 cordance with section 203(b)(5), no asbestos 

24 claim may be maintained with respect to asbes25 tos liabilities arising from the operations of a 


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1 person with respect to whose liabilities for as2 bestos claims a class action trust has been es3 tablished, whether such claim names the person 

4 or its successors or affiliates as defendants; and 

5 (B) if a termination takes effect under 

6 subsection (f), the exclusive remedy for all as7 bestos claims (including sunset claims and 

8 claims first arising or first presented after ter9 mination of the Fund) arising from such oper10 ations will be a claim against the class action 

11 trust to which the Administrator has trans12 ferred funds under subsection (f)(8) to pay as13 bestos claims, if necessary in proportionally re14 duced amounts. 

15 SEC. 406. RULES OF CONSTRUCTION RELATING TO LIABIL16 ITY OF THE UNITED STATES GOVERNMENT. 

17 (a) CAUSES OF ACTIONS.—Except as otherwise spe18 cifically provided in this Act, nothing in this Act shall be 

19 construed as creating a cause of action against the United 

20 States Government, any entity established under this Act, 

21 or any officer or employee of the United States Govern22 ment or such entity. 

23 (b) FUNDING LIABILITY.—Nothing in this Act shall 

24 be construed to— 


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1 (1) create any obligation of funding from the 

2 United States Government, other than the funding 

3 for personnel and support as provided under this 

4 Act; or 

5 (2) obligate the United States Government to 

6 pay any award or part of an award, if amounts in 

7 the Fund are inadequate. 

8 SEC. 407. RULES OF CONSTRUCTION. 

9 (a) LIBBY, MONTANA CLAIMANTS.—Nothing in this 

10 Act shall preclude the formation of a fund for the payment 

11 of eligible medical expenses related to treating asbestos12 related disease for current and former residents of Libby, 

13 Montana. The payment of any such medical expenses shall 

14 not be collateral source compensation as defined under 

15 section 134(a). 

16 (b) HEALTHCARE FROM PROVIDER OF CHOICE.— 

17 Nothing in this Act shall be construed to preclude any eli18 gible claimant from receiving healthcare from the provider 

19 of their choice. 

20 SEC. 408. VIOLATIONS OF ENVIRONMENTAL HEALTH AND 

21 SAFETY REQUIREMENTS. 

22 (a) ASBESTOS IN COMMERCE.—If the Administrator 

23 receives information concerning conduct occurring after 

24 the date of enactment of this Act that may have been a 

25 violation of standards issued by the Environmental ProtecVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00288 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 tion Agency under the Toxic Substances Control Act (15 

2 U.S.C. 2601 et seq.), relating to the manufacture, impor3 tation, processing, disposal, and distribution in commerce 

4 of asbestos-containing products, the Administrator shall 

5 refer the matter in writing within 30 days after receiving 

6 that information to the Administrator of the Environ7 mental Protection Agency and the United States attorney 

8 for possible civil or criminal penalties, including those 

9 under section 17 of the Toxic Substances Control Act (15 

10 U.S.C. 2616), and to the appropriate State authority with 

11 jurisdiction to investigate asbestos matters. 

12 (b) ASBESTOS AS AIR POLLUTANT.—If the Adminis13 trator receives information concerning conduct occurring 

14 after the date of enactment of this Act that may have been 

15 a violation of standards issued by the Environmental Pro16 tection Agency under the Clean Air Act (42 U.S.C. 7401 

17 et seq.), relating to asbestos as a hazardous air pollutant, 

18 the Administrator shall refer the matter in writing within 

19 30 days after receiving that information to the Adminis20 trator of the Environmental Protection Agency and the 

21 United States attorney for possible criminal and civil pen22 alties, including those under section 113 of the Clean Air 

23 Act (42 U.S.C. 7413), and to the appropriate State au24 thority with jurisdiction to investigate asbestos matters. 


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1 (c) OCCUPATIONAL EXPOSURE.—If the Adminis2 trator receives information concerning conduct occurring 

3 after the date of enactment of this Act that may have been 

4 a violation of standards issued by the Occupational Safety 

5 and Health Administration under the Occupational Safety 

6 and Health Act of 1970 (29 U.S.C. 651 et seq.), relating 

7 to occupational exposure to asbestos, the Administrator 

8 shall refer the matter in writing within 30 days after re9 ceiving that information and refer the matter to the Sec10 retary of Labor or the appropriate State agency with au11 thority to enforce occupational safety and health stand12 ards, for investigation for possible civil or criminal pen13 alties under section 17 of the Occupational Safety and 

14 Health Act of 1970 (29 U.S.C. 666). 

15 (d) ENHANCED CRIMINAL PENALTIES FOR WILLFUL

16 VIOLATIONS OF OCCUPATIONAL STANDARDS FOR ASBES17 TOS.—Section 17(e) of the Occupational Safety and 

18 Health Act of 1970 (29 U.S.C. 656(e)) is amended— 

19 (1) by striking ‘‘Any’’ and inserting ‘‘(1) Ex20 cept as provided in paragraph (2), any’’; and 

21 (2) by adding at the end the following: 

22 ‘‘(2) Any employer who willfully violates any standard 

23 issued under section 6 with respect to the control of occu24 pational exposure to asbestos, shall upon conviction be 

25 punished by a fine in accordance with section 3571 of title 


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1 18, United States Code, or by imprisonment for not more 

2 than 5 years, or both, except that if the conviction is for 

3 a violation committed after a first conviction of such per4 son, punishment shall be by a fine in accordance with sec5 tion 3571 of title 18, United States Code, or by imprison6 ment for not more than 10 years, or both.’’. 

7 (e) CONTRIBUTIONS TO THE ASBESTOS TRUST FUND

8 BY EPA AND OSHA ASBESTOS VIOLATORS.— 

9 (1) IN GENERAL.—The Administrator shall as10 sess employers or other individuals determined to 

11 have violated asbestos statutes, standards, or regula12 tions administered by the Department of Labor, the 

13 Environmental Protection Agency, and their State 

14 counterparts, for contributions to the Asbestos In15 jury Claims Resolution Fund (in this section re16 ferred to as the ‘‘Fund’’). 

17 (2) IDENTIFICATION OF VIOLATORS.—Each 

18 year, the Administrator shall— 

19 (A) in consultation with the Assistant Sec20 retary of Labor for Occupational Safety and 

21 Health, identify all employers that, during the 

22 previous year, were subject to final orders find23 ing that they violated standards issued by the 

24 Occupational Safety and Health Administration 

25 for control of occupational exposure to asbestos 


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1 (29 C.F.R. 1910.1001, 1915.1001, and 

2 1926.1101) or the equivalent asbestos stand3 ards issued by any State under section 18 of 

4 the Occupational Safety and Health Act (29 

5 U.S.C. 668); and 

6 (B) in consultation with the Administrator 

7 of the Environmental Protection Agency, iden8 tify all employers or other individuals who, dur9 ing the previous year, were subject to final or10 ders finding that they violated asbestos regula11 tions administered by the Environmental Pro12 tection Agency (including the National Emis13 sions Standard for Asbestos established under 

14 the Clean Air Act (42 U.S.C. 7401 et seq.), the 

15 asbestos worker protection standards estab16 lished under part 763 of title 40, Code of Fed17 eral Regulations, and the regulations banning 

18 asbestos promulgated under section 501 of this 

19 Act), or equivalent State asbestos regulations. 

20 (3) ASSESSMENT FOR CONTRIBUTION.—The 

21 Administrator shall assess each such identified em22 ployer or other individual for a contribution to the 

23 Fund for that year in an amount equal to— 

24 (A) 2 times the amount of total penalties 

25 assessed for the first violation of occupational 


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1 health and environmental statutes, standards, 

2 or regulations; 

3 (B) 4 times the amount of total penalties 

4 for a second violation of such statutes, stand5 ards, or regulations; and 

6 (C) 6 times the amount of total penalties 

7 for any violations thereafter. 

8 (4) LIABILITY.—Any assessment under this 

9 subsection shall be considered a liability under this 

10 Act. 

11 (5) PAYMENTS.—Each such employer or other 

12 individual assessed for a contribution to the Fund 

13 under this subsection shall make the required con14 tribution to the Fund within 90 days of the date of 

15 receipt of notice from the Administrator requiring 

16 payment. 

17 (6) ENFORCEMENT.—The Administrator is au18 thorized to bring a civil action under section 223(c) 

19 against any employer or other individual who fails to 

20 make timely payment of contributions assessed 

21 under this section. 

22 (f) REVIEW OF FEDERAL SENTENCING GUIDELINES

23 FOR ENVIRONMENTAL CRIMES RELATED TO ASBES24 TOS.—Under section 994 of title 28, United States Code, 

25 and in accordance with this section, the United States 


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1 Sentencing Commission shall review and amend, as appro2 priate, the United States Sentencing Guidelines and re3 lated policy statements to ensure that— 

4 (1) appropriate changes are made within the 

5 guidelines to reflect any statutory amendments that 

6 have occurred since the time that the current guide7 line was promulgated; 

8 (2) the base offense level, adjustments, and spe9 cific offense characteristics contained in section 

10 2Q1.2 of the United States Sentencing Guidelines 

11 (relating to mishandling of hazardous or toxic sub12 stances or pesticides; recordkeeping, tampering, and 

13 falsification; and unlawfully transporting hazardous 

14 materials in commerce) are increased as appropriate 

15 to ensure that future asbestos-related offenses re16 flect the seriousness of the offense, the harm to the 

17 community, the need for ongoing reform, and the 

18 highly regulated nature of asbestos; 

19 (3) the base offense level, adjustments, and spe20 cific offense characteristics are sufficient to deter 

21 and punish future activity and are adequate in cases 

22 in which the relevant offense conduct— 

23 (A) involves asbestos as a hazardous or 

24 toxic substance; and 


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1 (B) occurs after the date of enactment of 

2 this Act; 

3 (4) the adjustments and specific offense charac4 teristics contained in section 2B1.1 of the United 

5 States Sentencing Guidelines related to fraud, de6 ceit, and false statements, adequately take into ac7 count that asbestos was involved in the offense, and 

8 the possibility of death or serious bodily harm as a 

9 result; 

10 (5) the guidelines that apply to organizations in 

11 chapter 8 of the United States Sentencing Guide12 lines are sufficient to deter and punish organiza13 tional criminal misconduct that involves the use, 

14 handling, purchase, sale, disposal, or storage of as15 bestos; and 

16 (6) 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 fraud, de20 ceit, or false statements against the Office of Asbes21 tos Disease Compensation. 

22 SEC. 409. NONDISCRIMINATION OF HEALTH INSURANCE. 

23 (a) DENIAL, TERMINATION, OR ALTERATION OF

24 HEALTH COVERAGE.—No health insurer offering a health 

25 plan may deny or terminate coverage, or in any way alter 


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1 the terms of coverage, of any claimant or the beneficiary 

2 of a claimant, on account of the participation of the claim3 ant or beneficiary in a medical monitoring program under 

4 this Act, or as a result of any information discovered as 

5 a result of such medical monitoring. 

6 (b) DEFINITIONS.—In this section: 

7 (1) HEALTH INSURER.—The term ‘‘health in8 surer’’ means— 

9 (A) an insurance company, healthcare 

10 service contractor, fraternal benefit organiza11 tion, insurance agent, third-party administrator, 

12 insurance support organization, or other person 

13 subject to regulation under the laws related to 

14 health insurance of any State; 

15 (B) a managed care organization; or 

16 (C) an employee welfare benefit plan regu17 lated under the Employee Retirement Income 

18 Security Act of 1974 (29 U.S.C. 1001 et seq.). 

19 (2) HEALTH PLAN.—The term ‘‘health plan’’ 

20 means— 

21 (A) a group health plan (as such term is 

22 defined in section 607 of the Employee Retire23 ment Income Security Act of 1974 (29 U.S.C. 

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1 rangement (as defined in section 3(4) of such 

2 Act) that provides health insurance coverage; or 

3 (B) any contractual arrangement for the 

4 provision of a payment for healthcare, including 

5 any health insurance arrangement or any ar6 rangement consisting of a hospital or medical 

7 expense incurred policy or certificate, hospital 

8 or medical service plan contract, or health 

9 maintenance organizing subscriber contract. 

10 (c) CONFORMING AMENDMENTS.— 

11 (1) ERISA.—Section 702(a)(1) of the Em12 ployee Retirement Income Security Act of 1974 (29 

13 U.S.C. 1182(a)(1)), is amended by adding at the 

14 end the following: 

15 ‘‘(I) Participation in a medical monitoring 

16 program under the Fairness in Asbestos Injury 

17 Resolution Act of 2005.’’. 

18 (2) PUBLIC SERVICE HEALTH ACT.—Section 

19 2702(a)(1) of the Public Health Service Act (42 

20 U.S.C. 300gg–1(a)(1)) is amended by adding at the 

21 end the following: 

22 ‘‘(I) Participation in a medical monitoring 

23 program under the Fairness in Asbestos Injury 

24 Resolution Act of 2005.’’. 


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1 (3) INTERNAL REVENUE CODE OF 1986.—Sec2 tion 9802(a)(1) of the Internal Revenue Code of 

3 1986 is amended by adding at the end the following: 

4 ‘‘(I) Participation in a medical monitoring 

5 program under the Fairness in Asbestos Injury 

6 Resolution Act of 2005.’’. 

7 TITLE V—ASBESTOS BAN 

8 SEC. 501. PROHIBITION ON ASBESTOS CONTAINING PROD9 UCTS. 

10 (a) IN GENERAL.—Title II of the Toxic Substances 

11 Control Act (15 U.S.C. 2641 et seq.) is amended— 

12 (1) by inserting before section 201 (15 U.S.C. 

13 2641) the following: 

14 ‘‘Subtitle A—General Provisions’’; 

15 and 

16 (2) by adding at the end the following: 

17 ‘‘Subtitle B—Ban of Asbestos 

18 Containing Products 

19 ‘‘SEC. 221. BAN OF ASBESTOS CONTAINING PRODUCTS. 

20 ‘‘(a) DEFINITIONS.—In this chapter: 

21 ‘‘(1) ADMINISTRATOR.—The term ‘Adminis22 trator’ means the Administrator of the Environ23 mental Protection Agency. 

24 ‘‘(2) ASBESTOS.—The term ‘asbestos’ in25 cludes— 


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1 ‘‘(A) chrysotile; 

2 ‘‘(B) amosite; 

3 ‘‘(C) crocidolite; 

4 ‘‘(D) tremolite asbestos; 

5 ‘‘(E) winchite asbestos; 

6 ‘‘(F) richterite asbestos; 

7 ‘‘(G) anthophyllite asbestos; 

8 ‘‘(H) actinolite asbestos; 

9 ‘‘(I) amphibole asbestos; and 

10 ‘‘(J) any of the minerals listed under sub11 paragraphs (A) through (I) that has been 

12 chemically treated or altered, and any 

13 asbestiform variety, type, or component thereof. 

14 ‘‘(3) ASBESTOS CONTAINING PRODUCT.—The 

15 term ‘asbestos containing product’ means any prod16 uct (including any part) to which asbestos is delib17 erately or knowingly added or used because the spe18 cific properties of asbestos are necessary for product 

19 use or function. Under no circumstances shall the 

20 term ‘asbestos containing product’ be construed to 

21 include products that contain de minimus levels of 

22 naturally occurring asbestos as defined by the Ad23 ministrator not later than 1 year after the date of 

24 enactment of this chapter. 


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1 ‘‘(4) DISTRIBUTE IN COMMERCE.—The term 

2 ‘distribute in commerce’— 

3 ‘‘(A) has the meaning given the term in 

4 section 3 of the Toxic Substances Control Act 

5 (15 U.S.C. 2602); and 

6 ‘‘(B) shall not include— 

7 ‘‘(i) an action taken with respect to 

8 an asbestos containing product in connec9 tion with the end use of the asbestos con10 taining product by a person that is an end 

11 user, or an action taken by a person who 

12 purchases or receives a product, directly or 

13 indirectly, from an end user; or 

14 ‘‘(ii) distribution of an asbestos con15 taining product by a person solely for the 

16 purpose of disposal of the asbestos con17 taining product in compliance with applica18 ble Federal, State, and local requirements. 

19 ‘‘(b) IN GENERAL.—Subject to subsection (c), the 

20 Administrator shall promulgate— 

21 ‘‘(1) not later than 1 year after the date of en22 actment of this chapter, proposed regulations that— 

23 ‘‘(A) prohibit persons from manufacturing, 

24 processing, or distributing in commerce asbes25 tos containing products; and 


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1 ‘‘(B) provide for implementation of sub2 sections (c) and (d); and 

3 ‘‘(2) not later than 2 years after the date of en4 actment of this chapter, final regulations that, effec5 tive 60 days after the date of promulgation, prohibit 

6 persons from manufacturing, processing, or distrib7 uting in commerce asbestos containing products. 

8 ‘‘(c) EXEMPTIONS.— 

9 ‘‘(1) IN GENERAL.—Any person may petition 

10 the Administrator for, and the Administrator may 

11 grant, an exemption from the requirements of sub12 section (b), if the Administrator determines that— 

13 ‘‘(A) the exemption would not result in an 

14 unreasonable risk of injury to public health or 

15 the environment; and 

16 ‘‘(B) the person has made good faith ef17 forts to develop, but has been unable to develop, 

18 a substance, or identify a mineral that does not 

19 present an unreasonable risk of injury to public 

20 health or the environment and may be sub21 stituted for an asbestos containing product. 

22 ‘‘(2) TERMS AND CONDITIONS.—An exemption 

23 granted under this subsection shall be in effect for 

24 such period (not to exceed 5 years) and subject to 


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1 such terms and conditions as the Administrator may 

2 prescribe. 

3 ‘‘(3) GOVERNMENTAL USE.— 

4 ‘‘(A) IN GENERAL.—The Administrator of 

5 the Environmental Protection Agency shall pro6 vide an exemption from the requirements of 

7 subsection (b), without review or limit on dura8 tion, if such exemption for an asbestos con9 taining product is— 

10 ‘‘(i) sought by the Secretary of De11 fense and the Secretary certifies, and pro12 vides a copy of that certification to Con13 gress, that— 

14 ‘‘(I) use of the asbestos con15 taining product is necessary to the 

16 critical functions of the Department; 

17 ‘‘(II) no reasonable alternatives 

18 to the asbestos containing product 

19 exist for the intended purpose; and 

20 ‘‘(III) use of the asbestos con21 taining product will not result in an 

22 unreasonable risk to health or the en23 vironment; or 

24 ‘‘(ii) sought by the Administrator of 

25 the National Aeronautics and Space AdVerDate Aug 31 2005 03:32 Feb 22, 2006 Jkt 049200 PO 00000 Frm 00302 Fmt 6652 Sfmt 6201 E:\BILLS\S852.RIS S852

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1 ministration and the Administrator of the 

2 National Aeronautics and Space Adminis3 tration certifies, and provides a copy of 

4 that certification to Congress, that— 

5 ‘‘(I) the asbestos containing 

6 product is necessary to the critical 

7 functions of the National Aeronautics 

8 and Space Administration; 

9 ‘‘(II) no reasonable alternatives 

10 to the asbestos containing product 

11 exist for the intended purpose; and 

12 ‘‘(III) the use of the asbestos 

13 containing product will not result in 

14 an unreasonable risk to health or the 

15 environment. 

16 ‘‘(B) ADMINISTRATIVE PROCEDURE ACT.— 

17 Any certification required under subparagraph 

18 (A) shall not be subject to chapter 5 of title 5, 

19 United States Code (commonly referred to as 

20 the ‘Administrative Procedure Act’). 

21 ‘‘(4) SPECIFIC EXEMPTIONS.—The following 

22 are exempted: 

23 ‘‘(A) Asbestos diaphragms for use in the 

24 manufacture of chlor-alkali and the products 

25 and derivative therefrom. 


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1 ‘‘(B) Roofing cements, coatings, and 

2 mastics utilizing asbestos that is totally encap3 sulated with asphalt, subject to a determination 

4 by the Administrator of the Environmental Pro5 tection Agency under paragraph (5). 

6 ‘‘(5) ENVIRONMENTAL PROTECTION AGENCY

7 REVIEW.— 

8 ‘‘(A) REVIEW IN 18 MONTHS.—Not later 

9 than 18 months after the date of enactment of 

10 this chapter, the Administrator of the Environ11 mental Protection Agency shall complete a re12 view of the exemption for roofing cements, coat13 ings, and mastics utilizing asbestos that are to14 tally encapsulated with asphalt to determine 

15 whether— 

16 ‘‘(i) the exemption would result in an 

17 unreasonable risk of injury to public health 

18 or the environment; and 

19 ‘‘(ii) there are reasonable, commercial 

20 alternatives to the roofing cements, coat21 ings, and mastics utilizing asbestos that is 

22 totally encapsulated with asphalt. 

23 ‘‘(B) REVOCATION OF EXEMPTION.—Upon 

24 completion of the review, the Administrator of 

25 the Environmental Protection Agency shall have 


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1 the authority to revoke the exemption for the 

2 products exempted under paragraph (4)(B), if 

3 warranted. 

4 ‘‘(d) DISPOSAL.— 

5 ‘‘(1) IN GENERAL.—Except as provided in para6 graph (2), not later than 3 years after the date of 

7 enactment of this chapter, each person that pos8 sesses an asbestos containing product that is subject 

9 to the prohibition established under this section shall 

10 dispose of the asbestos containing product, by a 

11 means that is in compliance with applicable Federal, 

12 State, and local requirements. 

13 ‘‘(2) EXEMPTION.—Nothing in paragraph (1)— 

14 ‘‘(A) applies to an asbestos containing 

15 product that— 

16 ‘‘(i) is no longer in the stream of com17 merce; or 

18 ‘‘(ii) is in the possession of an end 

19 user or a person who purchases or receives 

20 an asbestos containing product directly or 

21 indirectly from an end user; or 

22 ‘‘(B) requires that an asbestos containing 

23 product described in subparagraph (A) be re24 moved or replaced.’’. 


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1 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 

2 The table of contents in section 1 of the Toxic Substances 

3 Control Act (15 U.S.C. prec. 2601) is amended— 

4 (1) by inserting before the item relating to sec5 tion 201 the following: 

‘‘Subtitle A—General Provisions’’; 

6 and 

7 (2) by adding at the end of the items relating 

8 to title II the following: 

‘‘Subtitle B—Ban of Asbestos Containing Products 

‘‘Sec. 221. Ban of asbestos containing products.’’. 

Æ 


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