(9) ULTIMATE PARENT.—The term ‘‘ultimate 
parent’’ means a person—
(A) that owned, as of December 31, 2002, 
the entire beneficial interest, directly or indi-
rectly, of at least 1 other person; and 
(B) whose entire beneficial interest was not 
owned, on December 31, 2002, directly or indi-
rectly, by any other single person (other than a 
natural person). 
SEC. 202. AUTHORITY AND TIERS. 
(a) LIABILITY FOR PAYMENTS TO THE FUND.—
(1) IN GENERAL.—Defendant participants shall 
be liable for payments to the Fund in accordance 
with this section based on tiers and subtiers as-
signed to defendant participants. 
(2) 
AGGREGATE
PAYMENT
OBLIGATIONS 
LEVEL.—Subject only to section 204(m), and not-
withstanding any other provision of this Act, the 
total payments required of all defendant participants 
over the life of the Fund shall not exceed 
$90,000,000,000. The Administrator shall have the 
authority to allocate the payments required of the 
defendant participants among the tiers as provided 
in this title.
(3) ABILITY
TO
ENTER
REORGANIZATION.—
Notwithstanding any other provision of this Act, all 
debtors that, together with all of their direct or indi-
rect majority-owned subsidiaries, have prior asbestos 
expenditures less than $1,000,000 may proceed with 
the filing, solicitation, and confirmation of a plan of 
reorganization that does not comply with the re-
quirements of this Act, including a trust and chan-
neling injunction. Any asbestos claim made in con-
junction with a plan of reorganization allowable 
under the preceding sentence shall be subject to sec-
tion 403(d) of this Act. 
(b) TIER I.—Tier I shall include all debtors that, to-
gether with all of their direct or indirect majority-owned 
subsidiaries, have prior asbestos expenditures greater than 
$1,000,000. 
(c) TREATMENT OF TIER I BUSINESS ENTITIES IN 
BANKRUPTCY.—
(1) DEFINITION.—In this subsection, the term 
‘‘bankrupt business entity’’ means a person that is 
not a natural person that—
(A) filed a petition for relief under chapter 
11, of title 11, United States Code, before Jan-
uary 1, 2003;
(B) has not confirmed a plan of reorga-
nization as of the date of enactment of this Act; 
and 
(C) the bankruptcy court presiding over 
the business entity’s case determines, after no-
tice and a hearing upon motion filed by the en-
tity within 30 days of the effective date of this 
Act, which motion shall be supported by—
(i) an affidavit or declaration of the 
Chief Executive Officer, Chief Financial 
Officer, or Chief Legal Officer of the busi-
ness entity; and 
(ii) copies of the entity’s public state-
ments and securities filings made in con-
nection with the entity’s filing for chapter 
11 protection that asbestos liability was 
not the sole or precipitating cause of the 
entity’s chapter 11 filing. Notice of such 
motion shall be as directed by the bank-
ruptcy court and the hearing shall be lim-
ited to consideration of the question of 
whether or not asbestos liability was the 
sole or precipitating cause of the entity’s 
chapter 11 filing. The bankruptcy court 
shall hold a hearing and make its deter-
mination with respect to the motion within 
60 days after the date the motion is filed. 
In making its determination, the bank-
ruptcy court shall take into account the af-
fidavits, public statements, and securities 
filings, and other information, if any, sub-
mitted by the entity and all other facts and 
circumstances presented by an objecting 
party. Any review of this determination 
must be an expedited appeal and limited to 
whether the decision was against the 
weight of the evidence. 
(2) 
PROCEEDING
WITH
REORGANIZATION 
PLAN.—A bankrupt business entity may proceed 
with the filing, solicitation, and confirmation of a 
plan of reorganization that does not comply with the 
requirements of this Act, including a trust and chan-
neling injunction described in section 524(g) of title 
11, United States Code, notwithstanding any other 
provisions of this Act, if—
(A) on request of a party in interest or on 
a motion of the court, and after a notice and 
a hearing, the bankruptcy court presiding over 
the chapter 11 case of the bankrupt business 
entity determines that—
(i) confirmation is necessary to permit 
the reorganization of that entity and as-
sure that all creditors and that entity are 
treated fairly and equitably; and 
(ii) confirmation is clearly favored by 
the balance of the equities; and 
(B) an order confirming the plan of reor-
ganization is entered by the bankruptcy court 
within 9 months after the date of enactment of 
this Act or such longer period of time approved 
by the bankruptcy court for cause shown. 
(3) APPLICABILITY.—If the bankruptcy court 
does not make the required determination, or if an 
order confirming the plan is not entered within 9 
months after the effective date of this Act or such 
longer period of time approved by the bankruptcy 
court for cause shown, the provisions of this Act 
shall apply to the bankrupt business entity notwith-
standing the certification. Any timely appeal under 
title 11, United States Code, from a confirmation 
order entered during the applicable time period shall 
automatically extend the time during which this Act 
is inapplicable to the bankrupt business entity, until 
the appeal is fully and finally resolved. 
(4) OFFSETS.—
(A) PAYMENTS BY INSURERS.—To the ex-
tent that a bankrupt business entity or debtor 
successfully confirms a plan of reorganization, 
including a trust, and channeling injunction 
that involves payments by insurers who are oth-
erwise subject to this Act as described in sec-
tion 524(g) of title 11, United States Code, an 
insurer who makes payments to the trust, shall 
obtain a dollar for dollar reduction in the 
amount otherwise payable by that insurer under 
this Act to the Fund. 
(B) CONTRIBUTIONS TO FUND.—Any cash 
payments by a bankrupt business entity, if any, 
to a trust described in section 524(g) of title 
11, United States Code, may be counted as a 
contribution to the Fund. 
(d) TIERS II THROUGH VI.—Except as provided in 
subsection (b) of this section and section 204, persons or 
affiliated groups are included in Tier II, III, IV, V, or 
VI according to the prior asbestos expenditures paid by 
such persons or affiliated groups as follows: 
(1) Tier II: $75,000,000 or greater. 
(2) Tier III: $50,000,000 or greater, but less 
than $75,000,000.
(3) Tier IV: $10,000,000 or greater, but less 
than $50,000,000. 
(4) Tier V: $5,000,000 or greater, but less than 
$10,000,000. 
(5) Tier VI: $1,000,000 or greater, but less 
than $5,000,000. 
(e) TIER PLACEMENT AND COSTS.—
(1) PERMANENT
TIER
PLACEMENT.—After a 
defendant participant or affiliated group is assigned 
to a tier and subtier under section 204(i)(6), the 
participant or affiliated group shall remain in that 
tier and subtier throughout the life of the Fund, re-
gardless of subsequent events, including—
(A) the filing of a petition under a chapter 
of title 11, United States Code; 
(B) a discharge of debt in bankruptcy; 
(C) the confirmation of a plan of reorga-
nization; or 
(D) the sale or transfer of assets to any 
other person or affiliated group, 
unless the Administrator finds that the information 
submitted by the participant or affiliated group to 
support its inclusion in that tier was inaccurate. 
(2) COSTS.—Payments to the Fund by all per-
sons that are the subject of a case under a chapter
of title 11, United States Code, after the date of en-
actment of this Act—
(A) shall constitute costs and expenses of 
administration of the case under section 503 of 
title 11, United States Code, and shall be pay-
able in accordance with the payment provisions 
under this subtitle notwithstanding the pend-
ency of the case under that title 11; 
(B) shall not be stayed or affected as to 
enforcement or collection by any stay or injunc-
tion power of any court; and 
(C) shall not be impaired or discharged in 
any current or future case under title 11, 
United States Code. 
(f) SUPERSEDING PROVISIONS.—
(1) IN GENERAL.—All of the following shall be 
superseded in their entireties by this Act: 
(A) The treatment of any asbestos claim in 
any plan of reorganization with respect to any 
debtor included in Tier I. 
(B) Any asbestos claim against any debtor 
included in Tier I. 
(C) Any agreement, understanding, or un-
dertaking by any such debtor or any third party 
with respect to the treatment of any asbestos
claim filed in a debtor’s bankruptcy case or 
with respect to a debtor before the date of en-
actment of this Act, whenever such debtor’s 
case is either still pending, if such case is pend-
ing under a chapter other than chapter 11 of 
title 11, United States Code, or subject to con-
firmation or substantial consummation of a 
plan of reorganization under chapter 11 of title 
11, United States Code. 
(2) PRIOR AGREEMENTS OF NO EFFECT.—Any 
plan of reorganization, agreement, understanding, or 
undertaking by any debtor or any third party under 
paragraph (1) of this subsection, to the extent it re-
lates to any asbestos claim, shall be of no force or 
effect, and no person shall have any right or claim 
with respect to any of the foregoing. 
SEC. 203. SUBTIERS. 
(a) IN GENERAL.—
(1) SUBTIER LIABILITY.—Except as otherwise 
provided under subsections (b), (d), and (l) of sec-
tion 204, persons or affiliated groups shall be in-
cluded within Tiers I through VII and shall pay 
amounts to the Fund in accordance with this sec-
tion. 
(2) REVENUES.—
(A) IN GENERAL.—For purposes of this 
section, revenues shall be determined in accord-
ance with generally accepted accounting prin-
ciples, consistently applied, using the amount 
reported as revenues in the annual report filed 
with the Securities and Exchange Commission 
in accordance with the Securities Exchange Act 
of 1934 (15 U.S.C. 78a et seq.) for the most 
recent fiscal year ending on or before December 
31, 2002. If the defendant participant or affili-
ated group does not file reports with the Securi-
ties and Exchange Commission, revenues shall 
be the amount that the defendant participant or 
affiliated group would have reported as reve-
nues under the rules of the Securities and Ex-
change Commission in the event that it had 
been required to file. 
(B) INSURANCE PREMIUMS.—Any portion 
of revenues of a defendant participant that is 
derived from insurance premiums shall not be 
used to calculate the payment obligation of that 
defendant participant under this subtitle. 
(C) DEBTORS.—Each debtor’s revenues 
shall include the revenues of the debtor and all 
of the direct or indirect majority-owned subsidi-
aries of that debtor, except that the pro forma 
revenues of a person that is included in Subtier 
2 of Tier I shall not be included in calculating 
the revenues of any debtor that is a direct or 
indirect majority owner of such Subtier 2 per-
son. If a debtor or affiliated group includes a 
person in respect of whose liabilities for asbes-
tos claims a class action trust has been estab-
lished, there shall be excluded from the 2002 
revenues of such debtor or affiliated group—
(i) all revenues of the person in re-
spect of whose liabilities for asbestos 
claims the class action trust was estab-
lished; and 
(ii) all revenues of the debtor and af-
filiated group attributable to the historical 
business operations or assets of such per-
son, regardless of whether such business 
operations or assets were owned or con-
ducted during the year 2002 by such per-
son or by any other person included within 
such debtor and affiliated group. 
(b) TIER I SUBTIERS.—
100
(1) IN GENERAL.—Each debtor in Tier I shall 
be included in subtiers and shall pay amounts to the 
Fund as provided under this section. 
(2) SUBTIER 1.—
(A) IN
GENERAL.—All persons that are 
debtors with prior asbestos expenditures of 
$1,000,000 or greater, shall be included in 
Subtier 1. 
(B) PAYMENT.—Each debtor included in 
Subtier 1 shall pay on an annual basis 1.5184 
percent of the debtor’s 2002 revenues. 
(C) OTHER ASSETS.—The Administrator, 
at the sole discretion of the Administrator, may 
allow a Subtier 1 debtor to satisfy its funding 
obligation under this paragraph with assets 
other than cash if the Administrator determines 
that requiring an all-cash payment of the debt-
or’s funding obligation would render the debt-
or’s reorganization infeasible. 
(D) LIABILITY.—
(i) IN GENERAL.—If a person who is 
subject to a case pending under a chapter 
of title 11, United States Code, as defined 
in section 201(3)(A)(i), does not pay when 
due any payment obligation for the debtor,
101
the Administrator shall have the right to 
seek payment of all or any portion of the 
entire amount due (as well as any other 
amount for which the debtor may be liable 
under sections 223 and 224) from any of 
the direct or indirect majority-owned sub-
sidiaries under section 201(3)(A)(ii). 
(ii) CAUSE
OF
ACTION.—Notwith-
standing section 221(e), this Act shall not 
preclude actions among persons within a 
debtor under section 201(3)(A) (i) and (ii) 
with respect to the payment obligations 
under this Act. 
(3) SUBTIER 2.—
(A) IN GENERAL.—Notwithstanding para-
graph (2), all persons that are debtors that 
have no material continuing business operations 
but hold cash or other assets that have been al-
located or earmarked for the settlement of as-
bestos claims shall be included in Subtier 2. 
(B) ASSIGNMENT OF ASSETS.—Not later 
than 90 days after the date of enactment of 
this Act, each person included in Subtier 2 shall 
assign all of its assets to the Fund. 
(4) SUBTIER 3.—
102
(A) IN GENERAL.—Notwithstanding para-
graph (2), all persons that are debtors other 
than those included in Subtier 2, which have no 
material continuing business operations and no 
cash or other assets allocated or earmarked for 
the settlement of any asbestos claim, shall be 
included in Subtier 3. 
(B) ASSIGNMENT OF UNENCUMBERED AS-
SETS.—Not later than 90 days after the date of 
enactment of this Act, each person included in 
Subtier 3 shall contribute an amount equal to 
50 percent of its total unencumbered assets. 
(C) CALCULATION OF UNENCUMBERED AS-
SETS.—Unencumbered assets shall be cal-
culated as the Subtier 3 person’s total assets, 
excluding insurance-related assets, less—
(i) all allowable administrative ex-
penses; 
(ii) allowable priority claims under 
section 507 of title 11, United States 
Code; and 
(iii) allowable secured claims. 
(5) CLASS ACTION TRUST.—The assets of any 
class action trust that has been established in re-
spect of the liabilities for asbestos claims of any per-
103
son included within a debtor and affiliated group 
that has been included in Tier I (exclusive of any as-
sets needed to pay previously incurred expenses and 
asbestos claims reduced to a final order or judgment 
within the meaning of section 403(d)(1) before the 
date of enactment of this Act) shall be transferred 
to the Fund not later than 6 months after the date 
of enactment of this Act. 
(c) TIER II SUBTIERS.—
(1) IN
GENERAL.—Each person or affiliated 
group in Tier II shall be included in 1 of the 5 
subtiers of Tier II, based on the person’s or affili-
ated group’s revenues. Such subtiers shall each con-
tain as close to an equal number of total persons 
and affiliated groups as possible, with—
(A) those persons or affiliated groups with 
the highest revenues included in Subtier 1; 
(B) those persons or affiliated groups with 
the next highest revenues included in Subtier 2; 
(C) those persons or affiliated groups with 
the lowest revenues included in Subtier 5; 
(D) those persons or affiliated groups with 
the next lowest revenues included in Subtier 4; 
and
104
(E) those persons or affiliated groups re-
maining included in Subtier 3. 
(2) PAYMENTS.—Each person or affiliated 
group within each subtier shall pay, on an annual 
basis, the following: 
(A) Subtier 1: $27,500,000. 
(B) Subtier 2: $24,750,000. 
(C) Subtier 3: $22,000,000. 
(D) Subtier 4: $19,250,000. 
(E) Subtier 5: $16,500,000. 
(d) TIER III SUBTIERS.—
(1) IN
GENERAL.—Each person or affiliated 
group in Tier III shall be included in 1 of the 5 
subtiers of Tier III, based on the person’s or affili-
ated group’s revenues. Such subtiers shall each con-
tain as close to an equal number of total persons 
and affiliated groups as possible, with—
(A) those persons or affiliated groups with 
the highest revenues included in Subtier 1; 
(B) those persons or affiliated groups with 
the next highest revenues included in Subtier 2; 
(C) those persons or affiliated groups with 
the lowest revenues included in Subtier 5;
105
(D) those persons or affiliated groups with 
the next lowest revenues included in Subtier 4; 
and 
(E) those persons or affiliated groups re-
maining included in Subtier 3. 
(2) PAYMENTS.—Each person or affiliated 
group within each subtier shall pay, on an annual 
basis, the following: 
(A) Subtier 1: $16,500,000. 
(B) Subtier 2: $13,750,000. 
(C) Subtier 3: $11,000,000. 
(D) Subtier 4: $8,250,000. 
(E) Subtier 5: $5,500,000. 
(e) TIER IV SUBTIERS.—
(1) IN
GENERAL.—Each person or affiliated 
group in Tier IV shall be included in 1 of the 4 
subtiers of Tier IV, based on the person’s or affili-
ated group’s revenues. Such subtiers shall each con-
tain as close to an equal number of total persons 
and affiliated groups as possible, with those persons 
or affiliated groups with the highest revenues in 
Subtier 1, those with the lowest revenues in Subtier 
4. Those persons or affiliated groups with the high-
est revenues among those remaining will be included 
in Subtier 2 and the rest in Subtier 3.
106
(2) PAYMENT.—Each person or affiliated group 
within each subtier shall pay, on an annual basis, 
the following: 
(A) Subtier 1: $3,850,000. 
(B) Subtier 2: $2,475,000. 
(C) Subtier 3: $1,650,000. 
(D) Subtier 4: $550,000. 
(f) TIER V SUBTIERS.—
(1) IN
GENERAL.—Each person or affiliated 
group in Tier V shall be included in 1 of the 3 
subtiers of Tier V, based on the person’s or affili-
ated group’s revenues. Such subtiers shall each con-
tain as close to an equal number of total persons 
and affiliated groups as possible, with those persons 
or affiliated groups with the highest revenues in 
Subtier 1, those with the lowest revenues in Subtier 
3, and those remaining in Subtier 2. 
(2) PAYMENT.—Each person or affiliated group 
within each subtier shall pay, on an annual basis, 
the following: 
(A) Subtier 1: $1,100,000. 
(B) Subtier 2: $550,000. 
(C) Subtier 3: $220,000. 
(g) TIER VI SUBTIERS.—
107
(1) IN
GENERAL.—Each person or affiliated 
group in Tier VI shall be included in 1 of the 3 
subtiers of Tier VI, based on the person’s or affili-
ated group’s revenues. Such subtiers shall each con-
tain as close to an equal number of total persons 
and affiliated groups as possible, with those persons 
or affiliated groups with the highest revenues in 
Subtier 1, those with the lowest revenues in Subtier 
3, and those remaining in Subtier 2. 
(2) PAYMENT.—Each person or affiliated group 
within each subtier shall pay, on an annual basis, 
the following: 
(A) Subtier 1: $550,000. 
(B) Subtier 2: $275,000. 
(C) Subtier 3: $110,000. 
(h) TIER VII.—
(1) IN
GENERAL.—Notwithstanding prior as-
bestos expenditures that might qualify a person or 
affiliated group to be included in Tiers II, III, IV, 
V, or VI, a person or affiliated group shall also be 
included in Tier VII, if the person or affiliated 
group—
(A) is or has at any time been subject to 
asbestos claims brought under the Federal Em-
ployers’ Liability Act (45 U.S.C. 51 et seq.) as
108
a result of operations as a common carrier by 
railroad; and 
(B) has paid (including any payments 
made by others on behalf of such person or af-
filiated group) not less than $5,000,000 in set-
tlement, judgment, defense, or indemnity costs 
relating to such claims. 
(2) ADDITIONAL
AMOUNT.—The payment re-
quirement for persons or affiliated groups included 
in Tier VII shall be in addition to any payment re-
quirement applicable to such person or affiliated 
group under Tiers II through VI. 
(3) SUBTIER
1.—Each person or affiliated 
group in Tier VII with revenues of $5,000,000,000 
or more is included in Subtier 1 and shall make an-
nual payments of $10,000,000 to the Fund. 
(4) SUBTIER
2.—Each person or affiliated 
group in Tier VII with revenues of less than 
$5,000,000,000, but not less than $3,000,000,000 is 
included in Subtier 2 and shall make annual pay-
ments of $5,000,000 to the Fund. 
(5) SUBTIER
3.—Each person or affiliated 
group in Tier VII with revenues of less than 
$3,000,000,000, but not less than $500,000,000 is
109
included in Subtier 3 and shall make annual pay-
ments of $500,000 to the Fund. 
(6) JOINT
VENTURE
REVENUES
AND
LIABIL-
ITY.—
(A) REVENUES.—For purposes of this sub-
section, the revenues of a joint venture shall be 
included on a pro rata basis reflecting relative 
joint ownership to calculate the revenues of the 
parents of that joint venture. The joint venture 
shall not be responsible for a contribution 
amount under this subsection. 
(B) LIABILITY.—For purposes of this sub-
section, the liability under the Act of April 22, 
1908 (45 U.S.C. 51 et seq.), commonly known 
as the Federal Employers’ Liability Act, shall 
be attributed to the parent owners of the joint 
venture on a pro rata basis, reflecting their rel-
ative share of ownership. The joint venture 
shall not be responsible for a payment amount 
under this provision. 
SEC. 204. ASSESSMENT ADMINISTRATION. 
(a) IN GENERAL.—Subject to subsection (m), each 
defendant participant or affiliated group shall pay to the 
Fund in the amounts provided under this subtitle as ap-
110
propriate for its tier and subtier each year until the earlier 
to occur of the following: 
(1) The participant or affiliated group has sat-
isfied its obligations under this subtitle during the 
first 23 annual payment cycles of the operation of 
the Fund. 
(2) The amount received by the Fund from de-
fendant participants, excluding any amounts rebated 
to defendant participants under subsection (d), 
equals the maximum aggregate payment obligation 
of section 202(a)(2). 
(b) 
SMALL
BUSINESS
EXEMPTION.—Notwith-
standing any other provision of this subtitle, a person or 
affiliated group that is a small business concern (as de-
fined under section 3 of the Small Business Act (15 
U.S.C. 632)), on December 31, 2002, is exempt from any 
payment requirement under this subtitle and shall not be 
included in the subtier allocations under section 203. 
(c) PROCEDURES.—The Administrator shall pre-
scribe procedures on how amounts payable under this sub-
title are to be paid, including, to the extent the Adminis-
trator determines appropriate, procedures relating to pay-
ment in installments. 
(d) ADJUSTMENTS.—
111
(1) IN GENERAL.—Under expedited procedures 
established by the Administrator, a defendant partic-
ipant may seek adjustment of the amount of its pay-
ment obligation based on severe financial hardship 
or demonstrated inequity. The Administrator may 
determine whether to grant an adjustment and the 
size of any such adjustment, in accordance with this 
subsection. A defendant participant has a right to 
obtain a rehearing of the Administrator’s determina-
tion under this subsection under the procedures pre-
scribed in subsection (i)(10). The Administrator may 
adjust a defendant participant’s payment obligations 
under this subsection, either by forgiving the rel-
evant portion of the otherwise applicable payment 
obligation or by providing relevant rebates from the 
defendant hardship and inequity adjustment account 
created under subsection (j) after payment of the 
otherwise applicable payment obligation, at the dis-
cretion of the Administrator. 
(2) FINANCIAL HARDSHIP ADJUSTMENTS.—
(A) IN
GENERAL.—A defendant partici-
pant may apply for an adjustment based on fi-
nancial hardship at any time during the period 
in which a payment obligation to the Fund re-
mains outstanding and may qualify for such ad-
112
justment by demonstrating that the amount of 
its payment obligation under the statutory allo-
cation would constitute a severe financial hard-
ship. 
(B) TERM.—Subject to the annual avail-
ability of funds in the defendant hardship and 
inequity adjustment account established under 
subsection (j), a financial hardship adjustment 
under this subsection shall have a term of 3 
years. 
(C) RENEWAL.—After an initial hardship 
adjustment is granted under this paragraph, a 
defendant participant may renew its hardship 
adjustment by demonstrating that it remains 
justified. 
(D) REINSTATEMENT.—Following the ex-
piration of the hardship adjustment period pro-
vided for under this section and during the 
funding period prescribed under subsection (a) 
or (m), the Administrator shall annually deter-
mine whether there has been a material change 
in the financial condition of the defendant par-
ticipant such that the Administrator may, con-
sistent with the policies and legislative intent 
underlying this Act, reinstate under terms and