113
conditions established by the Administrator any 
part or all of the defendant participant’s pay-
ment obligation under the statutory allocation 
that was not paid during the hardship adjust-
ment term. 
(3) INEQUITY ADJUSTMENTS.—
(A) IN
GENERAL.—A defendant partici-
pant—
(i) may qualify for an adjustment 
based on inequity by demonstrating that 
the amount of its payment obligation 
under the statutory allocation is exception-
ally inequitable—
(I) when measured against the 
amount of the likely cost to the de-
fendant participant net of insurance 
of its future liability in the tort sys-
tem in the absence of the Fund; or 
(II) when compared to the me-
dian payment rate for all defendant 
participants in the same tier; or 
(III) when measured against the 
percentage of the prior asbestos ex-
penditures of the defendant that were 
incurred with respect to claims that
114
neither resulted in an adverse judg-
ment against the defendant, nor were 
the subject of a settlement that re-
quired a payment to a plaintiff by or 
on behalf of that defendant; and 
(ii) shall qualify for a two-tier main 
tier and a two-tier subtier adjustment re-
ducing the defendant participant’s pay-
ment obligation based on inequity by dem-
onstrating that not less than 95 percent of 
such person’s prior asbestos expenditures 
arose from claims related to the manufac-
ture and sale of railroad locomotives and 
related products, so long as such person’s 
manufacture and sale of railroad loco-
motives and related products is temporally 
and causally remote. For purposes of this 
clause, a person’s manufacture and sale of 
railroad locomotives and related products 
shall be deemed to be temporally and caus-
ally remote if the asbestos claims histori-
cally and generally filed against such per-
son relate to the manufacture and sale of 
railroad locomotives and related products
115
by an entity dissolved more than 25 years 
before the date of enactment of this Act. 
(B) PAYMENT
RATE.—For purposes of 
subparagraph (A), the payment rate of a de-
fendant participant is the payment amount of 
the defendant participant as a percentage of 
such defendant participant’s gross revenues for 
the year ending December 31, 2002. 
(C) TERM.—Subject to the annual avail-
ability of funds in the defendant hardship and 
inequity adjustment account established under 
subsection (j), an inequity adjustment under 
this subsection shall have a term of 3 years. 
(D) RENEWAL.—A defendant participant 
may renew an inequity adjustment every 3 
years by demonstrating that the adjustment re-
mains justified. 
(E) REINSTATEMENT.—
(i) IN GENERAL.—Following the ter-
mination of an inequity adjustment under 
subparagraph (A), and during the funding 
period prescribed under subsection (a) or 
(m), the Administrator shall annually de-
termine whether there has been a material 
change in conditions which would support
116
a finding that the amount of the defendant 
participant’s payment under the statutory 
allocation was not inequitable. Based on 
this determination, the Administrator may, 
consistent with the policies and legislative 
intent underlying this Act, reinstate any or 
all of the payment obligations of the de-
fendant participant as if the inequity ad-
justment had not been granted for that 3-
year period. 
(ii) TERMS AND CONDITIONS.—In the 
event of a reinstatement under clause (i), 
the Administrator may require the defend-
ant participant to pay any part or all of 
amounts not paid due to the inequity ad-
justment on such terms and conditions as 
established by the Administrator. 
(4) LIMITATION
ON
ADJUSTMENTS.—The ag-
gregate total of financial hardship adjustments 
under paragraph (2) and inequity adjustments under 
paragraph (3) in effect in any given year shall not 
exceed $250,000,000, except to the extent additional 
monies are available for such adjustments as a re-
sult of carryover of prior years’ funds under sub-
117
section (j)(3) or as a result of monies being made 
available in that year under subsection (k)(1)(A). 
(5) ADVISORY PANELS.—
(A) APPOINTMENT.—The Administrator 
shall appoint a Financial Hardship Adjustment 
Panel and an Inequity Adjustment Panel to ad-
vise the Administrator in carrying out this sub-
section. 
(B) MEMBERSHIP.—The membership of 
the panels appointed under subparagraph (A) 
may overlap. 
(C) 
COORDINATION.—The 
panels 
ap-
pointed under subparagraph (A) shall coordi-
nate their deliberations and advice. 
(e) LIMITATION ON LIABILITY.—The liability of each 
defendant participant to pay to the Fund shall be limited 
to the payment obligations under this Act, and, except as 
provided in subsection (f) and section 203(b)(2)(D), no 
defendant participant shall have any liability for the pay-
ment obligations of any other defendant participant. 
(f) CONSOLIDATION OF PAYMENTS.—
(1) IN GENERAL.—For purposes of determining 
the payment levels of defendant participants, any af-
filiated group including 1 or more defendant partici-
pants may irrevocably elect, as part of the submis-