I 
108TH CONGRESS 
1ST SESSION H. R. 2503
To amend the Internal Revenue Code of 1986 to provide that tax attributes 
shall not be reduced in connection with a discharge of indebtedness 
in a title 11 case of a company having asbestos-related claims against 
it. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 18, 2003
Mr. COLLINS (for himself, Mr. LEWIS of Georgia, Ms. JACKSON-LEE of Texas, 
Mr. ROGERS of Kentucky, Ms. LEE, Mr. CONYERS, Mr. ENGLISH, and 
Mr. FOLEY) introduced the following bill; which was referred to the Com-
mittee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
that tax attributes shall not be reduced in connection 
with a discharge of indebtedness in a title 11 case of 
a company having asbestos-related claims against it.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Asbestos Claims Tax 
Fairness Act of 2003’’.
SEC. 2. PRESERVATION OF TAX ATTRIBUTES IN ASBESTOS 
TITLE 11 CASES. 
(a) NO ATTRIBUTE REDUCTION IN ASBESTOS TITLE 
11 CASES.—Subsection (b) of section 108 of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new paragraph: 
‘‘(6) NO ATTRIBUTE REDUCTION IN ASBESTOS 
TITLE 11 CASES.—
‘‘(A) IN
GENERAL.—Paragraph (1) shall 
not apply to any amount excluded from gross 
income under subparagraph (A) of subsection 
(a)(1) in an asbestos title 11 case. 
‘‘(B) ASBESTOS TITLE 11 CASE.—For pur-
poses of this paragraph, the term ‘asbestos title 
11 case’ means any case under title 11, United 
States Code, in which more than 50 percent of 
the value of the claims made against the com-
pany relate to liability arising from the manu-
facture, production, distribution, or use of as-
bestos.’’
(b) EXCEPTION TO 2ND OWNERSHIP CHANGE RULE 
FOR ASBESTOS TITLE 11 CASES.—Section 382(l)(5)(D) 
is amended by adding at the end the following sentence: 
‘‘The preceding sentence shall not apply to a 2nd owner-
ship change if the 1st ownership change was in an asbes-
tos title 11 case (within the meaning of section 
108(b)(6)(B)).’’
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to discharges of indebtedness and 
2nd ownership changes occurring after December 31, 
2002. 
SEC. 2. EXEMPTION FOR ASBESTOS-RELATED SETTLEMENT 
FUNDS. 
(a) EXEMPTION FOR ASBESTOS-RELATED SETTLE-
MENT FUNDS.—Subsection (b) of section 468B of the In-
ternal Revenue Code of 1986 is amended by adding at the 
end the following new paragraph: 
‘‘(6) EXEMPTION FROM TAX FOR ASBESTOS-RE-
LATED
SETTLEMENT
FUNDS.—Notwithstanding 
paragraph (1), no tax shall be imposed under this 
section or any other provision of this subtitle on any 
settlement fund to which this section or the regula-
tions thereunder applies that is established for the 
principal purpose of resolving and satisfying present 
and future claims relating to asbestos. The pre-
ceding sentence shall not apply to gains from the 
sale of stock in any corporation against which such 
claims originally applied other than gains from a 
sale of substantially all of the fund’s holdings in 
such corporation occurring within five years after
the later of December 31, 2002, or the date the set-
tlement fund first received stock in the corporation.’’
(b) CONFORMING AMENDMENTS.—
(1) Paragraph (1) of section 468B(b) of such 
Code is amended by striking ‘‘There’’ and inserting 
‘‘Except as provided in paragraph (6), there’’. 
(2) Subsection (g) of section 468B of such Code 
is amended by inserting ‘‘(other than subsection 
(b)(6))’’ after ‘‘Nothing in any provision of law’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after De-
cember 31, 2002.
Æ