PROTECT Asbestos Victims Act of 2021
Bill: S.574 | Sponsor: Sen. Tillis, Thomas (R-NC)
Policy area: Finance and Financial Sector

Summary:
Providing Responsible Oversight of Trusts to Ensure Compensation and Transparency for Asbestos Victims Act of 2021 or the PROTECT Asbestos Victims Act of 2021
This bill modifies several aspects of the asbestos bankruptcy trust system. An asbestos bankruptcy trust is established when a company subject to asbestos-related liability files for bankruptcy under chapter 11.
The bill allows the U.S. Trustee Program within the Department of Justice to investigate the administration and operation of asbestos bankruptcy trusts. Additionally, it creates new criminal offenses for making a false representation to, or a false claim for payment by, an asbestos bankruptcy trust.
Finally, an administrator of an asbestos bankruptcy trusts must report any Medicare benefits entitled to a claimant to the Centers for Medicare & Medicaid Services.

To amend title 11, United States Code, to promote the investigation of 
  fraudulent claims against certain trusts, to amend title 18, United 
  States Code, to provide penalties against fraudulent claims against 
                certain trusts, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Providing Responsible Oversight of 
Trusts to Ensure Compensation and Transparency for Asbestos Victims Act 
of 2021'' or the ``PROTECT Asbestos Victims Act of 2021''.

SEC. 2. REDUCTION OF FRAUDULENT CLAIMS AND DEMANDS RELATING TO CERTAIN 
              TRUSTS.

    (a) In General.--Section 524(g) of title 11, United States Code, is 
amended--
            (1) in paragraph (4)(B)(i), by striking ``the court 
        appoints a legal representative'' and inserting ``the United 
        States trustee or bankruptcy administrator appoints, under 
        paragraph (10), a future claims representative''; and
            (2) by adding at the end the following:
            ``(8) Investigation of fraudulent claims and demands.--
                    ``(A) In general.--Notwithstanding section 
                302(d)(3) of the Bankruptcy Judges, United States 
                Trustees, and Family Farmer Bankruptcy Act of 1986 (28 
                U.S.C. 581 note), rule 9035 of the Federal Rules of 
                Bankruptcy Procedure, or any other provision of law, in 
                any judicial district of the United States, the United 
                States trustee may investigate the administration and 
                operation of a trust described in paragraph (2)(B)(i), 
                including a trust described in paragraph (2)(B)(i) that 
                was created before the date of enactment of the PROTECT 
                Asbestos Victims Act of 2021.
                    ``(B) Authority of the united states trustee.--In 
                conducting an investigation under subparagraph (A), the 
                United States trustee shall have the authority--
                            ``(i) to conduct discovery, including by 
                        any means of discovery available to a trustee 
                        in an action under chapter 5 of title 11, 
                        relating to the trust, a claimant of the trust, 
                        or a claim against the trust, including a claim 
                        filed by a claimant against the trust in a 
                        bankruptcy court or other forum, 
                        notwithstanding the effect of any order 
                        purporting to limit the access of the United 
                        States trustee to any information relating to 
                        that discovery;
                            ``(ii) to conduct an audit or contract for 
                        an audit of any claim or demand paid, or to be 
                        paid, in whole or in part by the trust;
                            ``(iii) if the United States trustee has 
                        reasonable grounds to believe that a false 
                        claim or demand to be paid in whole or in part 
                        by a trust was made, to refer the matter to the 
                        United States attorney for the relevant 
                        judicial district, and, on the request of the 
                        United States attorney, assist the United 
                        States attorney in carrying out a prosecution 
                        based on that false claim or demand; and
                            ``(iv) to request that the court exercise 
                        any authority and impose remedies available to 
                        it, including those--
                                    ``(I) under the terms of the plan 
                                of reorganization to prevent abuse or 
                                mismanagement of the trust; and
                                    ``(II) under section 105.
                    ``(C) Standing.--In carrying out this paragraph, 
                the United States trustee shall have standing to raise, 
                to appear, and to be heard on any matter for which the 
                court has jurisdiction or for which the court has 
                reserved jurisdiction under the terms of the plan of 
                reorganization.
            ``(9) Accessing trust information.--
                    ``(A) In general.--Subject to section 107 and any 
                appropriate protective order, a trust described in 
                paragraph (2)(B)(i) shall, on written request, provide, 
                in a timely manner, any information relating to any 
                payment from, and any demand for payment from, the 
                trust to a party to an action at law or equity if the 
                action relates to liability for asbestos exposure.
                    ``(B) Costs.--A trust described in paragraph 
                (2)(B)(i) may require, from the person making a request 
                under subparagraph (A), payment of any reasonable cost 
                incurred to comply with the requirements under 
                subparagraph (A).
            ``(10) Appointment of future claims representatives.--
                    ``(A) In general.--On notification by a plan 
                proponent of the intention of the plan proponent to 
                seek an injunction under this subsection, the United 
                States trustee or bankruptcy administrator, after 
                consultation with parties in interest, shall appoint, 
                subject to the approval of the court, a disinterested 
                individual to serve as the future claims 
                representative.
                    ``(B) Support.--
                            ``(i) In general.--The future claims 
                        representative, subject to the approval of the 
                        court, may employ 1 or more attorneys, 
                        accountants, or other professional persons to 
                        represent the future claims representative or 
                        assist the future claims representative in 
                        carrying out the duties of the future claims 
                        representative under this subsection.
                            ``(ii) Qualifications.--An attorney, 
                        accountant, or other professional person 
                        employed under clause (i) to represent or 
                        assist the future claims representative--
                                    ``(I) shall be a disinterested 
                                person; and
                                    ``(II) may not represent any other 
                                entity having an adverse interest in 
                                connection with the case.
            ``(11) Power of the court.--Notwithstanding any other 
        provision of law, including paragraph (1)(B), sections 1127, 
        1141, and 1144 of this title, and section 157 of title 28, the 
        court may issue any order, process, or judgment that is 
        necessary and appropriate--
                    ``(A) to carry out the provisions of paragraphs (8) 
                and (9); or
                    ``(B) to enforce or implement a court order or 
                prevent an abuse of process relating to a trust 
                described in paragraph (2)(B)(i).
            ``(12) Benefits under medicare.--
                    ``(A) Potential eligible claimants.--Not later than 
                60 days after a claim is submitted to a trust described 
                in paragraph (2)(B)(i), the administrator of the trust 
                shall determine whether the claimant is entitled to 
                benefits under the Medicare program under title XVIII 
                of the Social Security Act (42 U.S.C. 1395 et seq.).
                    ``(B) Required information.--If a claimant is 
                determined to be entitled to benefits under 
                subparagraph (A), the administrator of the trust shall 
                submit to the Secretary of Health and Human Services, 
                in the form and manner (including frequency) specified 
                by the Secretary of Health and Human Services, the 
                information described in section 1862(b)(8)(B) of the 
                Social Security Act (42 U.S.C. 1395y(b)(8)(B)).''.
    (b) Compensation.--Section 330(a)(1) of title 11, United States 
Code, is amended--
            (1) by inserting ``a future claims representative appointed 
        under section 524(g)(10)(A),'' after ``section 333,''; and
            (2) by inserting ``, 524(g)(10)(B),'' after ``section 
        327''.
    (c) Reopening Cases.--Section 350 of title 11, United States Code, 
is amended by adding at the end the following:
    ``(c) Investigations by United States Trustee.--On the request of 
the United States trustee, a case shall be reopened in the court in 
which that case was closed in order to enable the United States trustee 
to conduct an investigation under section 524(g)(8).''.

SEC. 3. CRIMINAL PENALTIES.

    Section 152 of title 18, United States Code, is amended--
            (1) in paragraph (8), by striking ``or'' after the 
        semicolon;
            (2) by striking the comma at the end of paragraph (9) and 
        inserting a semicolon; and
            (3) by inserting after paragraph (9) the following:
            ``(10) knowingly and fraudulently makes a false 
        representation to a trust described in section 524(g)(2)(B)(i) 
        of title 11, or any official of a trust described in that 
        section, in relation to an investigation conducted under 
        section 524(g)(8)(A) of that title; or
            ``(11) knowingly and fraudulently makes a false claim or 
        demand to be paid in whole or in part by a trust described in 
        section 524(g)(2)(B)(i) of title 11,''.

SEC. 4. AUTHORITY OF UNITED STATES TRUSTEE.

    Section 586 of title 28, United States Code, is amended by adding 
at the end the following:
    ``(g) Investigation of Fraudulent Claims and Demands.--
            ``(1) In general.--The United States trustee may 
        investigate the administration and operation of a trust, 
        including a trust that was created before the date of enactment 
        of the PROTECT Asbestos Victims Act of 2021--
                    ``(A) described in section 524(g)(2)(B)(i) of title 
                11; or
                    ``(B) established under section 105(a) of title 11 
                for the purpose of assuming the asbestos-related 
                liabilities of a debtor.
            ``(2) Authority of the united states trustee.--In 
        conducting an investigation under subparagraph (A), the United 
        States trustee shall have the authority--
                    ``(A) to conduct discovery, including by any means 
                of discovery available to a trustee in an action under 
                chapter 5 of title 11, relating to the trust, a 
                claimant of the trust, or a claim against the trust, 
                including a claim filed by a claimant against the trust 
                in a bankruptcy court or other forum, notwithstanding 
                the effect of any order purporting to limit the access 
                of the United States trustee to any information 
                relating to that discovery;
                    ``(B) to conduct an audit or contract for an audit 
                of any claim or demand paid, or to be paid, in whole or 
                in part by the trust;
                    ``(C) if the United States trustee has reasonable 
                grounds to believe that a false claim or demand to be 
                paid in whole or in part by a trust was made, to refer 
                the matter to the United States attorney for the 
                relevant judicial district, and, on the request of the 
                United States attorney, assist the United States 
                attorney in carrying out a prosecution based on that 
                false claim or demand; and
                    ``(D) to request that the court exercise any 
                authority and impose remedies available to it, 
                including those--
                            ``(i) under the terms of the plan of 
                        reorganization to prevent abuse or 
                        mismanagement of the trust; and
                            ``(ii) under section 105.
            ``(3) Standing.--In carrying out this subsection, the 
        United States trustee shall have standing to raise, to appear, 
        and to be heard on any matter for which the court has 
        jurisdiction or for which the court has reserved jurisdiction 
        under the terms of the plan of reorganization.
            ``(4) Judicial districts established for alabama and north 
        carolina.--Notwithstanding section 302(d)(3) of the Bankruptcy 
        Judges, United States Trustees, and Family Farmer Bankruptcy 
        Act of 1986 (28 U.S.C. 581 note), rule 9035 of the Federal 
        Rules of Bankruptcy Procedure, or any other provision of law, 
        the United States trustee for the appropriate region described 
        in section 581(a) shall have the authority to carry out this 
        subsection with respect to a trust described in paragraph (1) 
        in a case that is filed in a judicial district established for 
        the State of Alabama or North Carolina.''.
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