[Congressional Record Volume 152, Number 14 (Wednesday, February 8, 2006)]
[Senate]
[Pages S786-S837]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FAIRNESS IN ASBESTOS INJURY RESOLUTION ACT OF 2005
The PRESIDING OFFICER. Under the previous order, the Senate will
proceed to the consideration of S. 852, which the clerk will report.
The assistant legislative clerk read as follows:
A bill (S. 852) to create a fair and efficient system to
resolve claims of victims of bodily injury caused by asbestos
exposure, and for other purposes.
The Senate proceeded to consider the bill which had been reported
from the Committee on the Judiciary, with amendments.
[Strike the parts shown in black brackets and insert the parts shown
in italic.]
S. 852
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Fairness
in Asbestos Injury Resolution Act of 2005'' or the ``FAIR Act
of 2005''.
(b) Table of Contents.--The table of contents of 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.
[[Page S787]]
Subtitle D--Awards
Sec. 131. Amount.
Sec. 132. Medical monitoring.
Sec. 133. Payment.
[Sec. 134. Reduction in benefit payments for collateral sources.]
Sec. 134. Setoffs for collateral source compensation and prior awards.
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.
Sec. 206. Accounting treatment.
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.
Sec. 226. National Mesothelioma Research and Treatment Program.
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.
Sec. 502. Naturally occurring asbestos.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--Congress finds the following:
(1) Millions of Americans have been exposed to forms of
asbestos that can have devastating health effects.
(2) Various injuries can be caused by exposure to some
forms of asbestos, including pleural disease and some forms
of cancer.
(3) The injuries caused by asbestos can have latency
periods of up to 40 years, and even limited exposure to some
forms of asbestos may result in injury in some cases.
(4) Asbestos litigation has had a significant detrimental
effect on the country's economy, driving companies into
bankruptcy, diverting resources from those who are truly
sick, and endangering jobs and pensions.
(5) The scope of the asbestos litigation crisis cuts across
every State and virtually every industry.
(6) The United States Supreme Court has recognized that
Congress must act to create a more rational asbestos claims
system. In 1991, a Judicial Conference Ad Hoc Committee on
Asbestos Litigation, appointed by Chief Justice William
Rehnquist, found that the ``ultimate solution should be
legislation recognizing the national proportions of the
problem . . . and creating a national asbestos dispute
resolution scheme . . .''. The Court found in 1997 in Amchem
Products Inc. v. Windsor, 521 U.S. 591, 595 (1997), that
``[t]he argument is sensibly made that a nationwide
administrative claims processing regime would provide the
most secure, fair, and efficient means of compensating
victims of asbestos exposure.'' In 1999, the Court in Ortiz
v. Fibreboard Corp., 527 U.S. 819, 821 (1999), found that the
``elephantine mass of asbestos cases . . . defies customary
judicial administration and calls for national legislation.''
That finding was again recognized in 2003 by the Court in
Norfolk & Western Railway Co. v. Ayers, 123 S. Ct. 1210
(2003).
(7) This crisis, and its significant effect on the health
and welfare of the people of the United States, on interstate
and foreign commerce, and on the bankruptcy system, compels
Congress to exercise its power to regulate interstate
commerce and create this legislative solution in the form of
a national asbestos injury claims resolution program to
supersede all existing methods to compensate those injured by
asbestos, except as specified in this Act.
(8) This crisis has also imposed a deleterious burden upon
the United States bankruptcy courts, which have assumed a
heavy burden of administering complicated and protracted
bankruptcies with limited personnel.
(9) This crisis has devastated many communities across the
country, but hardest hit has been Libby, Montana, where
tremolite asbestos, 1 of the most deadly forms of asbestos,
was contained in the vermiculite ore mined from the area and
despite ongoing cleanup by the Environmental Protection
Agency, many still suffer from the deadly dust.
(10) The asbestos found in Libby, Montana, tremolite
asbestos, has demonstrated an unusually high level of
toxicity, as compared to chrysotile asbestos. Diseases
contracted from this tremolite asbestos are unique and highly
progressive. These diseases typically manifest in a
characteristic pleural disease pattern, and often result in
severe impairment or death without radiographic interstitial
disease or typical chrysotile markers of radiographic
severity. According to the Agency for Toxic Substances and
Disease Registry previous studies by the National Institutes
of Occupational Safety and Health document significantly
increased rates of pulmonary abnormalities and disease
(asbestosis and lung cancer) among former workers.
(11) In Libby, Montana, exposure pathways are and were not
limited to the workplace, rather, for decades there has been
an unprecedented 24 hour per day contamination of the
community's homes, playgrounds, gardens, and community air,
such that the entire community of Libby, Montana, has been
designated a Superfund site and is listed on the
Environmental Protection Agency's National Priorities List.
(12) These multiple exposure pathways have caused severe
asbestos disease and death not only in former workers at the
mine and milling facilities, but also in the workers' spouses
and children, and in community members who had no direct
contact with the mine. According to the Environmental
Protection Agency, some potentially important alternative
pathways for past asbestos exposure include elevated
concentrations of asbestos in ambient air and recreational
exposures from children playing in piles of vermiculite.
Furthermore, the Environmental Protection Agency has
determined that current potential pathways of exposure
include vermiculite placed in walls and attics as thermal
insulation, vermiculite or ore used as road bed material, ore
used as ornamental landscaping, and vermiculite or
concentrated ore used as a soil and garden amendment or
aggregate in driveways.
(13) The Environmental Protection Agency also concluded,
``Asbestos contamination exists in a number of potential
source materials at multiple locations in and around the
residential and commercial area of Libby. . . While data are
not yet sufficient to perform reliable human-health risk
evaluations for all sources and all types of disturbance, it
is apparent that releases of fiber concentrations higher than
Occupational Safety and Health Administration standards may
occur in some cases . . . and that screening-level estimates
of lifetime excess cancer risk can exceed the upper-bound
risk range of 1E-04 usually used by the Environmental
Protection Agency for residents under a variety of exposure
scenarios. The occurrence of non-occupational asbestos-
related disease that has been observed among Libby residents
is extremely unusual, and has not been associated with
asbestos mines elsewhere, suggesting either very high and
prolonged environmental exposures and/or increased toxicity
of this form of amphibole asbestos.''.
(14) According to a November 2003 article from the Journal
Environmental Health Perspectives titled, Radiographic
Abnormalities and Exposure to Asbestos-Contaminated
Vermiculite in the Community of Libby, Montana, USA, Libby
residents who have evidence of ``no apparent exposure'',
i.e., did not work with asbestos, were not a family member of
a former worker, etc., had a greater rate of pleural
abnormalities (6.7 percent) than did those in control groups
or general populations found in other studies from other
states (which ranged from 0.2 percent to 4.6 percent).
``Given the ubiquitous nature of vermiculite contamination in
Libby, along with historical evidence of elevated asbestos
concentrations in the air, it would be difficult to find
participants who could be characterized as unexposed.''.
(b) Purpose.--The purpose of this Act is to--
(1) create a privately funded, publicly administered fund
to provide the necessary resources for a fair and efficient
system to resolve asbestos injury claims that will provide
compensation for legitimate present and future claimants of
asbestos exposure as provided in this Act;
(2) provide compensation to those present and future
victims based on the severity of their injuries, while
establishing a system flexible enough to accommodate
individuals whose conditions worsens;
(3) relieve the Federal and State courts of the burden of
the asbestos litigation; and
(4) increase economic stability by resolving the asbestos
litigation crisis that has bankrupted companies with asbestos
liability, diverted resources from the truly sick, and
endangered jobs and pensions.
SEC. 3. DEFINITIONS.
In this Act, the following definitions shall apply:
[[Page S788]]
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Office of Asbestos Disease Compensation
appointed under section 101(b).
(2) Asbestos.--The term ``asbestos'' includes--
(A) chrysotile;
(B) amosite;
(C) crocidolite;
(D) tremolite asbestos;
(E) winchite asbestos;
(F) richterite asbestos;
(G) anthophyllite asbestos;
(H) actinolite asbestos;
[(I) amphibole asbestos;]
(I) asbestiform amphibole minerals;
(J) any of the minerals listed under subparagraphs (A)
through (I) that has been chemically treated or altered, and
any asbestiform variety, type, or component thereof; and
(K) asbestos-containing material, such as asbestos-
containing products, automotive or industrial parts or
components, equipment, improvements to real property, and any
other material that contains asbestos in any physical or
chemical form.
(3) Asbestos claim.--
(A) In general.--The term ``asbestos claim'' means any
claim, premised on any theory, allegation, or cause of action
for damages or other relief presented in a civil action or
bankruptcy proceeding, directly, indirectly, or derivatively
arising out of, based on, or related to, in whole or part,
the health effects of exposure to asbestos, including loss of
consortium, wrongful death, and any derivative claim made by,
or on behalf of, any exposed person or any representative,
spouse, parent, child, or other relative of any exposed
person.
(B) Exclusion.--The term does not include--
(i) claims alleging damage or injury to tangible property;
(ii) claims for benefits under a workers' compensation law
or veterans' benefits program;
(iii) claims arising under any governmental or private
health, welfare, disability, death or compensation policy,
program or plan;
(iv) claims arising under any employment contract or
collective bargaining agreement; or
(v) claims arising out of medical malpractice.
(4) Asbestos claimant.--The term ``asbestos claimant''
means an individual who files a claim under section 113.
(5) Civil action.--The term ``civil action'' means all
suits of a civil nature in State or Federal court, whether
cognizable as cases at law or in equity or in admiralty, but
does not include an action relating to any workers'
compensation law, or a proceeding for benefits under any
veterans' benefits program.
(6) Collateral source compensation.--The term ``collateral
source compensation'' means the compensation that the
claimant received, or is entitled to receive, from a
defendant or an insurer of that defendant, or compensation
trust as a result of a final judgment or settlement for an
asbestos-related injury that is the subject of a claim filed
under section 113.
(7) Eligible disease or condition.--The term ``eligible
disease or condition'' means the extent that an illness meets
the medical criteria requirements established under subtitle
C of title I.
(8) Employers' liability act.--The term ``Act of April 22,
1908 (45 U.S.C. 51 et seq.), commonly known as the Employer's
Liability Act'' shall, for all purposes of this Act, include
the Act of June 5, 1920 (46 U.S.C. App. 688), commonly known
as the Jones Act, and the related phrase ``operations as a
common carrier by railroad'' shall include operations as an
employer of seamen.
(9) Fund.--The term ``Fund'' means the Asbestos Injury
Claims Resolution Fund established under section 221.
(10) Insurance receivership proceeding.--The term
``insurance receivership proceeding'' means any State
proceeding with respect to a financially impaired or
insolvent insurer or reinsurer including the liquidation,
rehabilitation, conservation, supervision, or ancillary
receivership of an insurer under State law.
(11) Law.--The term ``law'' includes all law, judicial or
administrative decisions, rules, regulations, or any other
principle or action having the effect of law.
(12) Participant.--
(A) In general.--The term ``participant'' means any person
subject to the funding requirements of title II, including--
(i) any defendant participant subject to liability for
payments under subtitle A of that title;
(ii) any insurer participant subject to a payment under
subtitle B of that title; and
(iii) any successor in interest of a participant.
(B) Exception.--
(i) In general.--A defendant participant shall not include
any person protected from any asbestos claim by reason of an
injunction entered in connection with a plan of
reorganization under chapter 11 of title 11, United States
Code, that has been confirmed by a duly entered order or
judgment of a court that is no longer subject to any appeal
or judicial review, and the substantial consummation, as such
term is defined in section 1101(2) of title 11, United States
Code, of such plan of reorganization has occurred.
(ii) Applicability.--Clause (i) shall not apply to a person
who may be liable under subtitle A of title II based on prior
asbestos expenditures related to asbestos claims that are not
covered by an injunction described under clause (i).
(13) Person.--The term ``person''--
(A) means an individual, trust, firm, joint stock company,
partnership, association, insurance company, reinsurance
company, or corporation; and
(B) does not include the United States, any State or local
government, or subdivision thereof, including school
districts and any general or special function governmental
unit established under State law.
(14) State.--The term ``State'' means any State of the
United States and also includes the District of Columbia,
Commonwealth of Puerto Rico, the Northern Mariana Islands,
the Virgin Islands, Guam, American Samoa, and any other
territory or possession of the United States or any political
subdivision of any of the entities under this paragraph.
(15) Substantially continues.--The term ``substantially
continues'' means that the business operations have not been
significantly modified by the change in ownership.
(16) Successor in interest.--The term ``successor in
interest'' means any person that [acquires assets], in 1 or a
series of transactions, acquires all or substantially all of
the assets and properties (including, without limitation,
under section 363(b) or 1123(b)(4) of title 11, United States
Code), and substantially continues the business operations,
of a participant. The factors to be considered in determining
whether a person is a successor in interest include--
(A) retention of the same facilities or location;
(B) retention of the same employees;
(C) maintaining the same job under the same working
conditions;
(D) retention of the same supervisory personnel;
(E) continuity of assets;
(F) production of the same product or offer of the same
service;
(G) retention of the same name;
(H) maintenance of the same customer base;
(I) identity of stocks, stockholders, and directors between
the asset seller and the purchaser; or
(J) whether the successor holds itself out as continuation
of previous enterprise, but expressly does not include
whether the person actually knew of the liability of the
participant under this Act.
(17) Veterans' benefits program.--The term ``veterans'
benefits program'' means any program for benefits in
connection with military service administered by the
Veterans' Administration under title 38, United States Code.
(18) Workers' compensation law.--The term ``workers'
compensation law''--
(A) means a law respecting a program administered by a
State or the United States to provide benefits, funded by a
responsible employer or its insurance carrier, for
occupational diseases or injuries or for disability or death
caused by occupational diseases or injuries;
(B) includes the Longshore and Harbor Workers' Compensation
Act (33 U.S.C. 901 et seq.) and chapter 81 of title 5, United
States Code; and
(C) does not include the Act of April 22, 1908 (45 U.S.C.
51 et seq.), commonly known as the Employers' Liability Act,
or damages recovered by any employee in a liability action
against an employer.
TITLE I--ASBESTOS CLAIMS RESOLUTION
Subtitle A--Office of Asbestos Disease Compensation
SEC. 101. ESTABLISHMENT OF OFFICE OF ASBESTOS DISEASE
COMPENSATION.
(a) In General.--
(1) Establishment.--There is established within the
Department of Labor the Office of Asbestos Disease
Compensation (hereinafter referred to in this Act as the
``Office''), which shall be headed by an Administrator.
(2) Purpose.--The purpose of the Office is to provide
timely, fair compensation, in the amounts and under the terms
specified in this Act, on a no-fault basis and in a non-
adversarial manner, to individuals whose health has been
adversely affected by exposure to asbestos.
[(3) Expenses.--There shall be available from the Asbestos
Injury Claims Resolution Fund to the Administrator such sums
as are necessary for the administrative expenses of the
Office, including the sums necessary for conducting the
studies provided for in section 121(e).]
(3) Termination of the office.--The Office of Asbestos
Disease Compensation shall terminate effective not later than
12 months following certification by the Administrator that
the Fund has neither paid a claim in the previous 12 months
nor has debt obligations remaining to pay.
(4) Expenses.--There shall be available from the Fund to
the Administrator such sums as are necessary for any and all
expenses associated with the Office of Asbestos Disease
Compensation and necessary to carry out the purposes of this
Act. Expenses covered should include--
(A) management of the Fund;
(B) personnel salaries and expenses, including retirement
and similar benefits;
(C) the sums necessary for conducting the studies provided
for in section 121(e);
(D) all administrative and legal expenses; and
(E) any other sum that could be attributable to the Fund.
(b) Appointment of Administrator.--
(1) In general.--The Administrator of the Office of
Asbestos Disease Compensation
[[Page S789]]
shall be appointed by the President, by and with the advice
and consent of the Senate. The Administrator shall serve for
a term of 5 years.
(2) Reporting.--The Administrator shall report directly to
the Assistant Secretary of Labor for the Employment Standards
Administration.
(c) Duties of Administrator.--
(1) In general.--The Administrator shall be responsible
for--
(A) processing claims for compensation for asbestos-related
injuries and paying compensation to eligible claimants under
the criteria and procedures established under title I;
(B) determining, levying, and collecting assessments on
participants under title II;
(C) appointing or contracting for the services of such
personnel, making such expenditures, and taking any other
actions as may be necessary and appropriate to carry out the
responsibilities of the Office, including entering into
cooperative agreements with other Federal agencies or State
agencies and entering into contracts with nongovernmental
entities;
(D) conducting such audits and additional oversight as
necessary to assure the integrity of the program;
(E) managing the Asbestos Injury Claims Resolution Fund
established under section 221, including--
(i) administering, in a fiduciary capacity, the assets of
the Fund for the [exclusive] primary purpose of providing
benefits to asbestos claimants and their beneficiaries;
(ii) defraying the reasonable expenses of administering the
Fund;
(iii) investing the assets of the Fund in accordance with
section 222(b);
(iv) retaining advisers, managers, and custodians who
possess the necessary facilities and expertise to provide for
the skilled and prudent management of the Fund, to assist in
the development, implementation and maintenance of the Fund's
investment policies and investment activities, and to provide
for the safekeeping and delivery of the Fund's assets; and
(v) borrowing amounts authorized by section 221(b) on
appropriate terms and conditions, including pledging the
assets of or payments to the Fund as collateral;
(F) promulgating such rules, regulations, and procedures as
may be necessary and appropriate to implement the provisions
of this Act;
(G) making such expenditures as may be necessary and
appropriate in the administration of this Act;
(H) excluding evidence and disqualifying or debarring any
attorney, physician, provider of medical or diagnostic
services, including laboratories and others who provide
evidence in support of a claimant's application for
compensation where the Administrator determines that
materially false, fraudulent, or fictitious statements or
practices have been submitted or engaged in by such
individuals or entities; and
(I) having all other powers incidental, necessary, or
appropriate to carrying out the functions of the Office.
(2) Certain enforcements.--For each infraction relating to
paragraph (1)(H), the Administrator also may impose a civil
penalty not to exceed $10,000 on any person or entity found
to have submitted or engaged in a materially false,
fraudulent, or fictitious statement or practice under this
Act. The Administrator shall prescribe appropriate
regulations to implement paragraph (1)(H).
(3) Selection of deputy administrators.--The Administrator
shall select a Deputy Administrator for Claims Administration
to carry out the Administrator's responsibilities under this
title and a Deputy Administrator for Fund Management to carry
out the Administrator's responsibilities under title II of
this Act. The Deputy Administrators shall report directly to
the Administrator and shall be in the Senior Executive
Service.
(d) Expeditious Determinations.--The Administrator shall
prescribe rules to expedite claims for asbestos claimants
with exigent circumstances in order to expedite the payment
of such claims as soon as possible after startup of the Fund.
The Administrator shall contract out the processing of such
claims.
(e) Audit and Personnel Review Procedures.--The
Administrator shall establish audit and personnel review
procedures for evaluating the accuracy of eligibility
recommendations of agency and contract personnel.
(f) Application of FOIA.--
(1) In general.--Section 552 of title 5, United States Code
(commonly referred to as the Freedom of Information Act)
shall apply to the Office of Asbestos Disease Compensation
and the Asbestos Insurers Commission.
[(2) Confidentiality.--Any person may designate any record
submitted under this section as a confidential commercial or
financial record for purposes of section 552 of title 5,
United States Code. The Administrator and the Chairman of the
Asbestos Insurers Commission shall adopt procedures for
designating such records as confidential. Information on
reserves and asbestos-related liabilities submitted by any
participant for the purpose of the allocation of payments
under subtitles A and B of title II shall be deemed to be
confidential financial records.]
(2) Confidentiality of financial records.--
(A) In general.--Any person may label any record submitted
under this section as a confidential commercial or financial
record for the purpose of requesting exemption from
disclosure under section 552(b)(4) of title 5, United States
Code.
(B) Duties of Administrator and Chairman of the Asbestos
Insurers Commission.--The Administrator and Chairman of the
Asbestos Insurers Commission--
(i) shall adopt procedures for--
(I) handling submitted records marked confidential; and
(II) protecting from disclosure records they determine to
be confidential commercial or financial information exempt
under section 552(b)(4) of title 5, United States Code; and
(ii) may establish a pre-submission determination process
to protect from disclosure records on reserves and asbestos-
related liabilities submitted by any defendant participant
that is exempt under section 552(b)(4) of title 5, United
States Code.
(C) Review of complaints.--Nothing in this section shall
supersede or preempt the de novo review of complaints filed
under 552(b)(4) of title 5, United States Code.
(3) Confidentiality of medical records.--Any claimant may
designate any record submitted under this section as a
confidential personnel or medical file for purposes of
section 552 of title 5, United States Code. The Administrator
and the Chairman of the Asbestos Insurers Commission shall
adopt procedures for designating such records as
confidential.
SEC. 102. ADVISORY COMMITTEE ON ASBESTOS DISEASE
COMPENSATION.
(a) Establishment.--
(1) In general.--Not later than 120 days after the date of
enactment of this Act, the Administrator shall establish an
Advisory Committee on Asbestos Disease Compensation
(hereinafter the ``Advisory Committee'').
(2) Composition and appointment.--The Advisory Committee
shall be composed of 24 20 members, appointed as follows--
(A) The Majority and Minority Leaders of the Senate, the
Speaker of the House, and the Minority Leader of the House
shall each appoint 4 members. Of the 4--
(i) 2 shall be selected to represent the interests of
claimants, at least 1 of whom shall be selected from among
individuals recommended by recognized national labor
federations; and
(ii) 2 shall be selected to represent the interests of
participants, 1 of whom shall be selected to represent the
interests of the insurer participants and 1 of whom shall be
selected to represent the interests of the defendant
participants.
(B) The Administrator shall appoint [8] 4 members, who
shall be individuals with qualifications and expertise in
occupational or pulmonary medicine, occupational health,
workers' compensation programs, financial administration,
investment of funds, program auditing, or other relevant
fields.
(3) Qualifications.--All of the members described in
paragraph (2) shall have expertise or experience relevant to
the asbestos compensation program, including experience or
expertise in diagnosing asbestos-related diseases and
conditions, assessing asbestos exposure and health risks,
filing asbestos claims, administering a compensation or
insurance program, or as actuaries, auditors, or investment
managers. None of the members described in paragraph (2)(B)
shall be individuals who, for each of the 5 years before
their appointments, earned more than 15 percent of their
income by serving in matters related to asbestos litigation
as consultants or expert witnesses.
(b) Duties.--The Advisory Committee shall advise the
Administrator on--
(1) claims filing and claims processing procedures;
(2) claimant assistance programs;
(3) audit procedures and programs to ensure the quality and
integrity of the compensation program;
(4) the development of a list of industries, occupations
and time periods for which there is a presumption of
substantial occupational exposure to asbestos;
(5) recommended analyses or research that should be
conducted to evaluate past claims and to project future
claims under the program;
(6) the annual report required to be submitted to Congress
under section 405; and
(7) such other matters related to the implementation of
this Act as the Administrator considers appropriate.
(c) Operation of the Committee.--
(1) Each member of the Advisory Committee shall be
appointed for a term of 3 years, except that, of the members
first appointed--
(A) 8 shall be appointed for a term of 1 year;
(B) 8 shall be appointed for a term of 2 years; and
(C) 8 shall be appointed for a term of 3 years, as
determined by the Administrator at the time of appointment.
(2) Any member appointed to fill a vacancy occurring before
the expiration of the term shall be appointed only for the
remainder of such term.
(3) The Administrator shall designate a Chairperson and
Vice Chairperson from among members of the Advisory Committee
appointed under subsection (a)(2)(B).
(4) The Advisory Committee shall meet at the call of the
Chairperson or the majority of its members, and at a minimum
shall meet at least 4 times per year during the first 5 years
of the asbestos compensation program, and at least 2 times
per year thereafter.
(5) The Administrator shall provide to the Committee such
information as is necessary and appropriate for the Committee
to carry out its responsibilities under this section. The
Administrator may, upon request of the
[[Page S790]]
Advisory Committee, secure directly from any Federal, State,
or local department or agency such information as may be
necessary and appropriate to enable the Advisory Committee to
carry out its duties under this section. Upon request of the
Administrator, the head of such department or agency shall
furnish such information to the Advisory Committee.
(6) The Administrator shall provide the Advisory Committee
with such administrative support as is reasonably necessary
to enable it to perform its functions.
(d) Expenses.--Members of the Advisory Committee, other
than full-time employees of the United States, while
attending meetings of the Advisory Committee or while
otherwise serving at the request of the Administrator, and
while serving away from their homes or regular places of
business, shall be allowed travel and meal expenses,
including per diem in lieu of subsistence, as authorized by
section 5703 of title 5, United States Code, for individuals
in the Government serving without pay.
SEC. 103. MEDICAL ADVISORY COMMITTEE.
(a) In General.--The Administrator shall establish a
Medical Advisory Committee to provide expert advice regarding
medical issues arising under the statute.
(b) Qualifications.--None of the members of the Medical
Advisory Committee shall be individuals who, for each of the
5 years before their appointments, earned more than 15
percent of their income by serving in matters related to
asbestos litigation as consultants or expert witnesses.
SEC. 104. CLAIMANT ASSISTANCE.
(a) Establishment.--Not later than 180 days after the
enactment of this Act, the Administrator shall establish a
comprehensive asbestos claimant assistance program to--
(1) publicize and provide information to potential
claimants about the availability of benefits for eligible
claimants under this Act, and the procedures for filing
claims and for obtaining assistance in filing claims;
(2) provide assistance to potential claimants in preparing
and submitting claims, including assistance in obtaining the
documentation necessary to support a claim;
(3) respond to inquiries from claimants and potential
claimants;
(4) provide training with respect to the applicable
procedures for the preparation and filing of claims to
persons who provide assistance or representation to
claimants; and
(5) provide for the establishment of a website where
claimants may access all relevant forms and information.
(b) Resource Centers.--The claimant assistance program
shall provide for the establishment of resource centers in
areas where there are determined to be large concentrations
of potential claimants. These centers shall be located, to
the extent feasible, in facilities of the Department of Labor
or other Federal agencies.
(c) Contracts.--The claimant assistance program may be
carried out in part through contracts with labor
organizations, community-based organizations, and other
entities which represent or provide services to potential
claimants, except that such organizations may not have a
financial interest in the outcome of claims filed with the
Office.
(d) Legal Assistance.--
(1) In general.--As part of the program established under
subsection (a), the Administrator shall establish a legal
assistance program to provide assistance to asbestos
claimants concerning legal representation issues.
(2) List of qualified attorneys.--As part of the program,
the Administrator shall maintain a roster of qualified
attorneys who have agreed to provide pro bono services to
asbestos claimants under rules established by the
Administrator. The claimants shall not be required to use the
attorneys listed on such roster.
(3) Notice.--
(A) Notice by administrator.--The Administrator shall
provide asbestos claimants with notice of, and information
relating to--
(i) pro bono services for legal assistance available to
those claimants; and
(ii) any limitations on attorneys fees for claims filed
under this title.
(B) Notice by attorneys.--Before a person becomes a client
of an attorney with respect to an asbestos claim, that
attorney shall provide notice to that person of pro bono
services for legal assistance available for that claim.
(e) Attorney's Fees.--
(1) In general.--Notwithstanding any contract, the
representative of an individual may not receive, for services
rendered in connection with the claim of an individual under
the Fund, more than 5 percent of a final award made (whether
by the Administrator initially or as a result of
administrative review) under the Fund on such claim.
(2) Penalty.--Any representative of an asbestos claimant
who violates this subsection shall be fined not more than the
greater of--
(A) $5,000; or
(B) twice the amount received by the representative for
services rendered in connection with each such violation.
SEC. 105. PHYSICIANS PANELS.
(a) Appointment.--The Administrator shall, in accordance
with section 3109 of title 5, United States Code, appoint
physicians with experience and competency in diagnosing
asbestos-related diseases to be available to serve on
Physicians Panels, as necessary to carry out this Act.
(b) Formation of Panels.--
(1) In general.--The Administrator shall periodically
determine--
(A) the number of Physicians Panels necessary for the
efficient conduct of the medical review process under section
121;
(B) the number of Physicians Panels necessary for the
efficient conduct of the exceptional medical claims process
under section 121; and
(C) the particular expertise necessary for each panel.
(2) Expertise.--Each Physicians Panel shall be composed of
members having the particular expertise determined necessary
by the Administrator, randomly selected from among the
physicians appointed under subsection (a) having such
expertise.
(3) Panel members.--
[(A) In general].--Except as provided under subparagraph
(B), each Physicians Panel shall consist of 3 physicians, 2
of whom shall be designated to participate in each case
submitted to the Physicians Panel, and the third of whom
shall be consulted in the event of disagreement.
[(B) Waiver.--The Administrator may waive the provisions of
subparagraph (A) and may provide for panels of less than 3
physicians, if the Administrator determines that--
(i) there is a shortage of qualified physicians available
for service on panels; and
(ii) such shortage will result in administrative delay in
the claims process.]
(c) Qualifications.--To be eligible to serve on a
Physicians Panel under subsection (a), a person shall be--
(1) a physician licensed in any State;
(2) board-certified in pulmonary medicine, occupational
medicine, internal medicine, oncology, or pathology; and
(3) an individual who, for each of the 5 years before and
during his or her appointment to a Physicians Panel, has
earned not more than 15 percent of his or her income as an
employee of a participating defendant or insurer or a law
firm representing any party in asbestos litigation or as a
consultant or expert witness in matters related to asbestos
litigation.
(d) Duties.--Members of a Physicians Panel shall--
(1) make such medical determinations as are required to be
made by Physicians Panels under section 121; and
(2) perform such other functions as required under this
Act.
(e) Compensation.--Notwithstanding any limitation otherwise
established under section 3109 of title 5, United States
Code, the Administrator shall be authorized to pay members of
a Physician Panel such compensation as is reasonably
necessary to obtain their services.
(f) Federal Advisory Committee Act.--A Physicians Panel
established under this section shall not be subject to the
Federal Advisory Committee Act (5 U.S.C. App. 2).
SEC. 106. PROGRAM STARTUP.
(a) Interim Regulations.--Not later than 90 days after the
date of enactment of this Act, the Administrator shall
promulgate interim regulations and procedures for the
processing of claims under title I and the operation of the
Fund under title II, including procedures for the expediting
of exigent health claims, and processing of claims through
the claims facility.
(b) Interim Personnel.--The Secretary of Labor and the
Assistant Secretary of Labor for the Employment Standards
Administration may make available to the Administrator on a
temporary basis such personnel and other resources as may be
necessary to facilitate the expeditious startup of the
program. The Administrator may in addition contract with
individuals or entities having relevant experience to assist
in the expeditious startup of the program. Such relevant
experience shall include, but not be limited to, experience
with the review of workers' compensation, occupational
disease, or similar claims and with financial matters
relevant to the operation of the program.
(c) Exigent Health Claims.--
(1) In general.--The Administrator shall develop procedures
to provide for an expedited process to categorize, evaluate,
and pay exigent health claims. Such procedures shall include,
pending promulgation of final regulations, adoption of
interim regulations as needed for processing of exigent
health claims.
(2) Eligible exigent health claims.--A claim shall qualify
for treatment as an exigent health claim if [the claimant is
living and the claimant provides]--
(A) the claimant is living and provides a diagnosis of
mesothelioma meeting the requirements of section 121(d)(10);
[or]
(B) the claimant is living and provides a declaration or
affidavit, from a physician who has examined the claimant
within 120 days before the date of such declaration or
affidavit, that the physician has diagnosed the claimant as
being terminally ill from an asbestos-related illness and
having a life expectancy of less than 1 year.; or
(C) the claimant is the spouse or child of an eligible
exigent health claimant who--
(i) was living when the claim was filed with the Fund, or
if before the implementation of interim regulations for the
filing of claims with the Fund, on the date of enactment of
this Act;
(ii) has since died from an asbestos-related disease or
condition; and
(iii) has not received compensation from the Fund for the
disease or condition for which the claim was filed.
(3) Additional exigent health claims.--The Administrator
may, in final regulations
[[Page S791]]
promulgated under section 101(c), designate additional
categories of claims that qualify as exigent health claims
under this subsection.
(4) Claims facility.--To facilitate the prompt payment of
exigent health claims, the Administrator shall contract with
a claims facility, which applying the medical criteria of
section 121, may enter into settlements with claimants. [In
the absence of an offer of judgment as provided under section
106(f)(2), the claimant may submit a claim to that claims
facility. The claims facility shall receive the claimant's
submissions and evaluate the claim in accordance with
subtitles B and C. The claims facility shall then submit the
file to the Administrator for payment in accordance with
subtitle D. This subsection shall not apply to exceptional
medical claims under section 121(f). A claimant may appeal
any decision at a claims facility with the Administrator in
accordance with section 114.] The processing and payment of
claims shall be subject to regulations promulgated under this
Act.
(5) Authorization for contracts with claims facilities.--
The Administrator may enter into contracts with [claims
facilities] a claims facility for the processing of claims
(except for exceptional medical claims) in accordance with
this title.
(d) Extreme Financial Hardship Claims.--The Administrator
shall, in final regulations promulgated under section 101(c),
designate categories of claims to be handled on an expedited
basis as a result of extreme financial hardship.
(e) Interim Administrator.--Until an Administrator is
appointed and confirmed under section 101(b), the
responsibilities of the Administrator under this Act shall be
performed by the Assistant Secretary of Labor for the
Employment Standards Administration, who shall have all the
authority conferred by this Act on the Administrator and who
shall be deemed to be the Administrator for purposes of this
Act. Before final regulations being promulgated relating to
claims processing, the Interim Administrator may prioritize
claims processing, without regard to the time requirements
prescribed in subtitle B of this title, based on severity of
illness and likelihood that [the illness in question was
caused by exposure to asbestos.] exposure to asbestos was a
substantial contributing factor for the illness in question.
[(f) Stay of Claims; Return to Tort System.--
[(1) Stay of claims.--Notwithstanding any other provision
of this Act, any asbestos claim pending as of the date of
enactment of this Act, other than a claim to which section
403(d)(2)(A) applies, shall be subject to a stay.
[(2) Exigent health claims.--
[(A) Procedures for settlement of exigent health claims.--
[(i) In general.--Any person that has filed a timely
exigent health claim seeking a judgment or order for monetary
damages in any Federal or State court before or after the
date of enactment of this Act, may immediately seek an offer
of judgment of such claim in accordance with this
subparagraph.
[(ii) Filing.--
[(I) In general.--The claimant shall file with the
Administrator and serve upon all defendants in the pending
court action an election to pursue an offer of judgment--
[(aa) within 60 days after the date of enactment of this
Act, if the claim was filed in a Federal or State court
before such date of enactment; and
[(bb) within 60 days after the date of the filing of the
claim, if the claim is filed in a Federal or State court on
or after the date of enactment of this Act.
[(II) Stay.--If the claimant fails to file and serve a
timely election under this clause, the stay under
subparagraph (B) shall remain in effect.
[(iii) Information.--A claimant who has filed a timely
election under clause (ii) shall within 60 days after filing
provide to each defendant and to the Administrator--
[(I) the amount received or due to be received as a result
of all settlements that would qualify as a collateral source
under section 134, together with copies of all settlement
agreements and related documents sufficient to show the
accuracy of that amount;
[(II) all information that the claimant would be required
to provide to the Administrator in support of a claim under
sections 115 and 121; and
[(III) a certification by the claimant that the information
provided is true and complete.
[(iv) Certification.--The certification provided under
clause (iii) shall be subject to the same penalties for false
or misleading statements that would be applicable with regard
to information provided to the Administrator in support of a
claim.
[(v) Offer of judgment.--Within 30 days after service of a
complete set of the information described in clause (iii),
any defendant may file and serve on all parties a good faith
offer of judgment in an aggregate amount not to exceed the
total amount to which the claimant may be entitled under
section 131 after adjustment for collateral sources under
section 134. If the aggregate amount offered by all
defendants exceeds the limitation in this clause, all offers
shall be deemed reduced pro-rata until the aggregate amount
equals the amount provided under section 131.
[(vi) Acceptance or rejection.--Within 20 days after the
service of the last offer of judgment, the claimant shall
either accept or reject such offers. If the amount of the
offer made by any defendant individually, or by any
defendants jointly, equals or exceeds 100 percent of what the
claimant would receive under the Fund, the claimant shall
accept such offer and release any outstanding asbestos
claims.
[(vii) Lump sum payment.--Any accepted offer of judgment
shall be payable within 30 days and in 1 lump sum in order to
settle the pending claim.
[(viii) Recovery of costs.--Any defendant whose offer of
judgment is accepted and has settled an asbestos claim under
clauses (vi) and (vii) may recover the cost of such
settlement by deducting from its next and subsequent
contributions to the Fund for the full amount of the payment
made by such defendant to the exigent health claimant, unless
the Administrator finds, on the basis of clear and convincing
evidence, that--
[(I) the claimant did not meet the requirements of an
exigent health claim; and
[(II) the defendant's offer was collusive or otherwise not
in good faith.
[(ix) Indemnification.--In any case in which the
Administrator refuses to grant full indemnification under
clause (viii), the Administrator may provide such partial
indemnification as may be fair and just in the circumstances.
If Administrator denies indemnification, the defendant may
seek contribution from other non-settling defendants, as well
as reimbursement under the defendant's applicable insurance
policies. If the Administrator refuses to grant full or
partial indemnification based on collusive action, the
defendant may pursue any available remedy against the
claimant.
[(x) Refusal to make offer.--If a defendant refuses to make
an offer of judgment, the claimant may continue to seek a
judgment or order for monetary damages from the court where
the case is
[currently pending in an amount not to exceed 150 percent of
what the claimant would receive if the claimant had filed a
claim with the Fund. Such a judgment or order may also
provide an award for claimant's attorneys' fees and the costs
of litigation.
[(xi) Rejection of offer.--If the claimant rejects the
offer as less than what the claimant would qualify to receive
under section 131, the claimant may immediately pursue the
claim in court where the claimant shall demonstrate, in
addition to all other essential elements of the claimant's
claim against any defendant, that the claimant meets the
requirements of section 121.
[(B) Pursual of exigent health claims.--
[(i) Stay.--If a claimant does not elect to seek an offer
of judgment under subparagraph (A), the pending claim is
stayed for 9 months after the date of enactment of this Act.
[(ii) Defendant offer.--If a claimant does not elect to
seek an offer of judgment under subparagraph (A), the
defendant may elect to make an offer according to the
provisions of this paragraph, except that a claimant shall
not be required to accept that offer. The claimant shall
accept or reject the offer within 20 days.
[(iii) Claims facility.--If a claimant does not elect to
seek an offer of judgment under subparagraph (A), the
claimant may seek an award from the Fund through the claims
facility under section 106 (c)(4).
[(iv) Continuance of claims.--If, after 9 months after the
date of enactment of this Act, the Administrator cannot
certify to Congress that the Fund is operational and paying
exigent health claims at a reasonable rate, each person that
has filed an exigent health claim before such date of
enactment and stayed under this paragraph may continue their
exigent health claims in the court where the case was pending
on the date of enactment of this Act. For exigent claims
filed after the date of enactment of this Act, by claimants
who do not elect to seek an offer of judgment under
subparagraph (A), the pending claim is stayed for 9 months
after the date the claim is filed, unless during that period
the Administrator can certify to Congress that the Fund is
operational and paying valid claims at a reasonable rate.
[(C) Credit of claim and effect of operational fund.--If an
asbestos claim is pursued in Federal or State court in
accordance with this paragraph, any recovery by the claimant
shall be a collateral source compensation for purposes of
section 134.
[(3) Pursual of asbestos claims in federal or state
court.--
[(A) In general.--Notwithstanding any other provision of
this Act, if, not later than 24 months after the date of
enactment of this Act, the Administrator cannot certify to
Congress that the Fund is operational and paying all valid
claims at a reasonable rate, any person with a non-exigent
asbestos claim stayed under this paragraph, except for any
person whose claim does not exceed a Level I claim, may
pursue that claim in the Federal district court or State
court located within--
[(i) the State of residence of the claimant; or
[(ii) the State in which the asbestos exposure arose.
[(B) Defendants not found.--If any defendant cannot be
found in the State described in clause (i) or (ii) of
subparagraph (A), the claim may be pursued in the Federal
district court or State court located within any State in
which the defendant may be found.
[(C) Determination of most appropriate forum.--If a person
alleges that the asbestos exposure occurred in more than 1
county (or
[[Page S792]]
Federal district), the trial court shall determine which
State and county (or Federal district) is the most
appropriate forum for the claim. If the court determines that
another forum would be the most appropriate forum for a
claim, the court shall dismiss the claim. Any otherwise
applicable statute of limitations shall be tolled beginning
on the date the claim was filed and ending on the date the
claim is dismissed under this subparagraph.]
[(D) State venue requirements.--Nothing in this paragraph
shall preempt or supersede any State's law relating to venue
requirements within that State which are more restrictive.
[(E) Credit of claim and effect of operational or
nonoperational fund.--
[(i) Credit of claim.--If an asbestos claim is pursued in
Federal or State court in accordance with this paragraph, any
recovery by the claimant shall be a collateral source
compensation for purposes of section 134.
[(ii) Operational fund.--If the Administrator subsequently
certifies to Congress that the Fund has become operational
and paying all valid asbestos claims at a reasonable rate,
any claim in a civil action in Federal or State court that is
not actually on trial before a jury which has been impaneled
and presentation of evidence has commenced, but before its
deliberation, or before a judge and is at the presentation of
evidence, may, at the option of the claimant, be deemed a
reinstated claim against the Fund and the civil action before
the Federal or State court shall be null and void.
[(iii) Nonoperational fund.--Notwithstanding any other
provision of this Act, if the Administrator subsequently
certifies to Congress that the Fund cannot become operational
and paying all valid asbestos claims at a reasonable rate,
all asbestos claims that have a stay may be filed or
reinstated.]
(f) Stay of Claims; Return to Tort System.--
(1) Stay of claims.--Notwithstanding any other provision of
this Act, any asbestos claim pending on the date of enactment
of this Act, other than a claim to which section 403(d)(2)
applies, shall be subject to a stay.
(2) Exigent health claims.--
(A) Procedures for settlement of exigent health claims.--
(i) In general.--Any person that has filed an exigent
health claim, as provided under subsection (c)(2), seeking a
judgment or order for monetary damages in any Federal or
State court before the date of the enactment of this Act, may
seek a settlement in accordance with this paragraph. Any
person with an exigent health claim, as provided under
subsection (c)(2), that arises after such date of enactment
may seek a settlement offer in accordance with this
paragraph.
(ii) Filing.--
(I) In general.--At any time before the Fund or claims
facility being certified as operational and paying exigent
health claims at a reasonable rate, any person with an
exigent health claim as described under clause (i) shall file
a notice of their intent to seek a settlement or shall file
their exigent health claim with the Administrator or claims
facility. Filing of an exigent health claim with the
Administrator or claims facility may serve as notice of
intent to seek a settlement.
(II) Stay.--If the claimant fails to file under this
clause, the stay shall remain in effect except as provided
under subparagraph (B).
(iii) Exigent health claim information.--To file an exigent
health claim, each individual shall provide all of the
following information:
(I) The amount received or entitled to be received as a
result of all settlements that would qualify as a collateral
source under section 134, and copies of all settlement
agreements and related documents sufficient to show the
accuracy of that amount.
(II) All information that the claimant would be required to
provide to the Administrator in support of a claim under
sections 113 and 121.
(III) A certification by the claimant that the information
provided is true and complete. The certification provided
under this subclause shall be subject to the same penalties
for false or misleading statements that would be applicable
with regard to information provided to the Administrator or
claims facility in support of a claim.
(IV) For exigent health claims arising after the date of
enactment of this Act, the claimant shall identify each
defendant that would be an appropriate defendant in a civil
action seeking damages for the asbestos claim of the
claimant. The identification of a defendant under this
subclause shall be required to comply with rule 11 of the
Federal Rules of Civil Procedure.
(iv) Timing.--A claimant who has filed a notice of their
intent to seek a settlement under clause (ii) shall within 60
days after filing notice provide to the Administrator or
claims facility, and all affected defendants the information
required under clause (iii). If a claimant has filed an
exigent health claim under clause (ii) the Administrator
shall provide all affected defendants the information
required under clause (iii).
(v) Administrator or claims facility certification of
settlement.--
(I) Determination.--Within 60 days after the information
under clause (iii) is provided, the Administrator or claims
facility shall determine whether or not the claim meets the
requirements of an exigent health claim.
(II) Requirements met.--If the Administrator or claims
facility determines that the claim meets the requirements of
an exigent health claim, the Administrator or claims facility
shall immediately--
(aa) issue and serve on all parties a certification of
eligibility of such claim;
(bb) determine the value of such claim under the Fund by
subtracting from the amount in section 131 the total amount
of collateral source compensation received by the claimant;
and
(cc) pay the award of compensation to the claimant under
clause (xi).
(III) Requirements not met.--If the requirements under
clause (iii) are not met, the claimant shall have 30 days to
perfect the claim. If the claimant fails to perfect the claim
within that 30-day period or the Administrator or claims
facility determines that the claim does not meet the
requirements of an exigent health claim, the claim shall not
be eligible to proceed under this paragraph. A claimant may
appeal any decision issued by a claims facility with the
Administrator in accordance with section 114.
(vi) Failure to certify.--If the Administrator or claims
facility is unable to process the claim and does not make a
determination regarding the certification of the claim as
required under clause (v), the Administrator or claims
facility shall within 10 days after the end of the 60-day
period referred to under clause (v)(I) provide notice of the
failure to act to the claimant and the defendants in the
pending Federal or State court action or the defendants
identified under clause (iii)(IV). If the Administrator or
claims facility fails to provide such notice within 10 days,
the claimant may elect to provide the notice to the affected
defendants to prompt a settlement offer.
(vii) Failure to pay.--If the Administrator or claims
facility does not pay the award as required under clause
(xi), the Administrator shall refer the certified claim
within 10 days as a certified exigent health claim to the
defendants in the pending Federal and State court action or
to the potential defendants identified under clause (iii)(IV)
for exigent claims arising after the date of enactment of
this Act.
(viii) Settlement offer.--Any defendant or defendants may,
within 30 days after receipt of such notice as provided under
clause (vi) or (vii), file and serve on all parties and the
Administrator a good faith settlement offer in an aggregate
amount not to exceed the total amount to which the claimant
may be entitled under section 131. If the aggregate amount
offered by all defendants exceeds the award determined by the
Administrator, all offers shall be deemed reduced pro-rata
until the aggregate amount equals the award amount. An
acceptance of such settlement offer in a pending court action
shall be subject to approval by the trial judge or authorized
magistrate in the court where the claim is pending. The court
shall approve any such accepted offer within 20 days after a
request, unless there is evidence of bad faith or fraud. No
court approval is necessary if the exigent health claim was
certified by the Administrator or claims facility under
clause (v).
(ix) Opportunity to cure.--If the settlement offer is
rejected for being less than what the claimant was entitled
to under the Fund, the defendants shall have 10 business days
to make an amended offer. If the amended offer equals 100
percent of what the claimant would receive under the Fund,
the claimant shall accept such settlement offer in writing.
If the settlement offer is again rejected as less than what
the claimant is entitled to under the Fund or if defendants
fail to make an amended offer, the claimant shall be entitled
to recover 150 percent of what the claimant would receive
under the Fund before the stay being lifted under
subparagraph (B). If the amount of the amended settlement
offer made by the Administrator, claims facility, or
defendants equals 150 percent of what the claimant would
receive under the Fund, the claimant shall accept such
settlement in writing.
(x) Acceptance or rejection.--Within 20 days after receipt
of the settlement offer, or the amended settlement offer, the
claimant shall either accept or reject such offer in writing.
If the amount of the settlement offer made by the
Administrator, claims facility, or defendants equals 100
percent of what the claimant would receive under the Fund,
the claimant shall accept such settlement in writing.
(xi) Payment schedule.--
(I) Mesothelioma claimants.--For mesothelioma claimants--
(aa) an initial payment of 50 percent shall be made within
30 days after the date the settlement is accepted and the
second and final payment shall be made 6 months after date
the settlement is accepted; or
(bb) if the Administrator determines that the payment
schedule would impose a severe financial hardship on the
Fund, or if the court determines that the settlement offer
would impose a severe financial hardship on the defendant,
the payments may be extended 50 percent in 6 months and 50
percent 11 months after the date the settlement offer is
accepted.
(II) Other exigent claimants.--For other exigent claimants,
as defined under section 106(c)(2)(B and (C)--
(aa) the initial payment of 50 percent shall be made within
6 months after the date the settlement is accepted and the
second and final payment shall be made 12 months after date
the settlement is accepted; or
(bb) if the Administrator determines that the payment
schedule would impose a severe financial hardship on the
Fund, or if the court determines that the settlement offer
would impose a severe financial hardship on the defendants,
the payments may be extended 50 percent within 1 year after
the date the settlement offer is accepted and 50 percent in 2
years after date the settlement offer is accepted.
(III) Release.--Once a claimant has received final payment
of the accepted settlement offer the claimant shall release
any outstanding asbestos claims.
(xii) Recovery of costs.--
(I) In general.--Any defendant whose settlement offer is
accepted may recover the cost of such settlement by deducting
from the defendant's next and subsequent contributions to the
Fund the full amount of the payment made by
[[Page S793]]
such defendant to the exigent health claimant, unless the
Administrator finds, on the basis of clear and convincing
evidence, that the defendant's offer is not in good faith.
Any such payment shall be considered a payment to the Fund
for purposes of section 404(e)(1) and in response to the
payment obligations imposed on defendant and insurer
participants in title II.
(II) Reimbursement.--Notwithstanding subclause (I), if the
deductions from the defendant participant's next and
subsequent contributions to the Fund do not fully recover the
cost of such payments on or before its third annual
contribution to the Fund, the Fund shall reimburse such
defendant for such remaining cost not later than 6 months
after the date of the third scheduled Fund contribution.
(xiii) Failure to make offer.--If defendants fail to make a
settlement offer within the 30-day period described under
clause (viii) or make amended offers within the 10 business
day cure period described under clause (ix), the claimant
shall be entitled to recover 150 percent of what the claimant
would receive under the Fund before the stay being lifted
under subparagraph (B).
(xiv) Failure to pay.--If defendants fail to pay an
accepted settlement offer within the payment schedule under
clause (xi), the claimant shall be entitled to recover 150
percent of what the claimant would receive under the Fund
before the stay being lifted under subparagraph (B). If the
stay is lifted under subparagraph (B) the claimant may seek a
judgment or order for monetary damages from the court where
the case is currently pending or the appropriate Federal or
State court for claims arising after the date of enactment of
this Act.
(B) Continuation of exigent health claims.--If 9 months
after an exigent health claim has been filed under
subparagraph (A)(ii), a claimant has not received a
settlement under subparagraph (A)(xi) and the Administrator
has not certified to Congress that the Fund or claims
facility is operational and paying exigent health claims at a
reasonable rate, such exigent health claimant, may seek a
judgment or order for monetary damages from the court where
the case is currently pending or the appropriate Federal or
State court for claims arising after the date of enactment of
this Act.
(C) Credit of claim and effect of operational fund.--
(i) Collateral source.--If an asbestos claim is pursued in
Federal or State court in accordance with this paragraph, any
recovery by the claimant shall be a collateral source
compensation for purposes of section 134.
(ii) Recovery of costs.--Any defendant may recover the cost
of any claim continued in court for up to the amount the
claimant would receive under the Fund by deducting from the
defendant's next and subsequent contributions to the Fund for
the full amount of the payment made by such defendant to the
exigent health claimant.
(3) Pursual of non-exigent asbestos claims in federal or
state court.--
(A) In general.--Notwithstanding any other provision of
this Act, if not later than 24 months after the date of
enactment of this Act, the Administrator cannot certify to
Congress that the Fund is operational and paying all valid
claims at a reasonable rate, any person with a non-exigent
asbestos claim stayed, except for any person whose claim does
not exceed a Level I claim, may pursue that claim in the
Federal district court or State court located within--
(i) the State of residence of the claimant; or
(ii) the State in which the asbestos exposure occurred.
(B) Defendants not found.--If any defendant cannot be found
in the State described under subparagraph (A) (i) or (ii),
the claim may be pursued in the Federal district court or
State court located within any State in which the defendant
may be found.
(C) Determination of most appropriate forum.--If a person
alleges that the asbestos exposure occurred in more than 1
county (or Federal district), the trial court shall determine
which State and county (or Federal district) is the most
appropriate forum for the claim. If the court determines that
another forum would be the most appropriate forum for a
claim, the court shall dismiss the claim. Any otherwise
applicable statute of limitations shall be tolled beginning
on the date the claim was filed and ending on the date the
claim is dismissed under this subparagraph.
(D) State venue requirements.--Nothing in this paragraph
shall preempt or supersede any State law relating to venue
requirements within that State which are more restrictive.
(E) Credit of claim and effect of operational or
nonoperational fund.--
(i) Credit of claim.--If an asbestos claim is pursued in
Federal or State court in accordance with this paragraph, any
recovery by the claimant shall be a collateral source
compensation for purposes of section 134.
(ii) Operational certification.--Operational certification
shall be a filing in the Federal Register confirming that the
Fund is operational and paying all valid asbestos claims at a
reasonable rate.
(iii) Operational preconditions.--
(I) The Administrator may not issue a operational
certification until--
(aa) 60 days after the funding allocation information
required under section 221(e) has been published in the
Federal Register; and
(bb) insurers subject to section 212(a)(3) submit their
names and information to the Administrator within 30 days
after the date of enactment of this Act and 60 days after the
Administrator publishes such information in the Federal
Register.
(iv) Operational fund.--If the Administrator issues an
operational certification and notifies Congress that the Fund
has become operational and paying all valid asbestos claims
at a reasonable rate, any nonexigent asbestos claim in a
civil action in Federal or State court that is not on trial
before a jury which has been impaneled and presentation of
evidence has commenced, but before its deliberation, or
before a judge and is at the presentation of evidence shall
be deemed a reinstated claim against the Fund and the civil
action before the Federal or State court shall be null and
void.
(v) Nonoperational fund.--Notwithstanding any other
provision of this Act, if the Administrator subsequently
issues a nonoperational certification and notifies Congress
that the Fund is unable to become operational and pay all
valid asbestos claims at a reasonable rate, all asbestos
claims that have a stay may be filed or reinstated.
SEC. 107. AUTHORITY OF THE ADMINISTRATOR.
The Administrator, on any matter within the jurisdiction of
the Administrator under this Act, may--
(1) issue subpoenas for and compel the attendance of
witnesses within a radius of 200 miles;
(2) administer oaths;
(3) examine witnesses;
(4) require the production of books, papers, documents, and
other evidence; and
(5) request assistance from other Federal agencies with the
performance of the duties of the Administrator under this
Act.
Subtitle B--Asbestos Disease Compensation Procedures
SEC. 111. ESSENTIAL ELEMENTS OF ELIGIBLE CLAIM.
To be eligible for an award under this Act for an asbestos-
related disease or injury, an individual shall--
(1) file a claim in a timely manner in accordance with
section 113; and
(2) prove, by a preponderance of the evidence, that the
claimant suffers from an eligible disease or condition, as
demonstrated by evidence that meets the requirements
established under subtitle C.
SEC. 112. GENERAL RULE CONCERNING NO-FAULT COMPENSATION.
An asbestos claimant shall not be required to demonstrate
that the asbestos-related injury for which the claim is being
made resulted from the negligence or other fault of any other
person.
SEC. 113. FILING OF CLAIMS.
(a) Who May Submit.--
(1) In general.--Any individual who has suffered from a
disease or condition that is believed to meet the
requirements established under subtitle C (or the personal
representative of the individual, if the individual is
deceased or incompetent) may file a claim with the Office for
an award with respect to such injury.
(2) Definition.--In this Act, the term ``personal
representative'' shall have the same meaning as that term is
defined in section 104.4 of title 28 of the Code of Federal
Regulations, as in effect on December 31, 2004.
(3) Limitation.--A claim may not be filed by any person
seeking contribution or indemnity.
(4) Effect of multiple injuries.--
(A) In general.--A claimant who receives an award for an
eligible disease or condition shall not be precluded from
submitting claims for and receiving additional awards under
this title for any higher disease level for which the
claimant becomes eligible, subject to appropriate setoffs as
provided under section 134.
(B) Libby, montana claims.--
(i) In general.--Notwithstanding subparagraph (A), if a
Libby, Montana claimant worsens in condition, as measured by
pulmonary function tests, such that a claimant qualifies for
a higher nonmalignant level, the claimant shall be eligible
for an additional award, at the appropriate level, offset by
any award previously paid under this Act, such that a
claimant would qualify for Level IV if the claimant satisfies
section 121(f)(8), and would qualify for Level V if the
claimant provides--
(I) a diagnosis of bilateral asbestos related nonmalignant
disease;
(II) evidence of TLC or FVC less than 60 percent; and
(III) supporting medical documentation establishing
asbestos exposure as a substantial contributing factor in
causing the pulmonary condition in question, and excluding
more likely causes of that pulmonary condition.
(ii) Subsequent malignant disease.--If a Libby, Montana,
claimant develops malignant disease, such that the claimant
qualifies for Level VI, VII, VIII, or IX, subparagraph (A)
shall apply.
(b) Statute of Limitations.--
(1) In general.--Except as otherwise provided in this
subsection, if an individual fails to file a claim with the
Office under this section within 5 years after the date on
which the individual first--
(A) received a medical diagnosis of an eligible disease or
condition as provided for under this subtitle and subtitle C;
or
(B) discovered facts that would have led a reasonable
person to obtain a medical diagnosis with respect to an
eligible disease or condition,
any claim relating to that injury, and any other asbestos
claim related to that injury, If a claim is not filed with
the Office within the limitations period specified in this
subsection for that category of claim, such claim shall be
extinguished, and any recovery thereon shall be prohibited.
(2) Initial claims.--An initial claim for an award under
this Act shall be filed within 5 years after the date on
which the claimant first received a medical diagnosis and
medical test results sufficient to satisfy the criteria for
the disease level for which the claimant is seeking
compensation.
(3) Claims for additional awards.--
(A) Non-malignant diseases.--If a claimant has previously
filed a timely initial claim for compensation for any non-
malignant disease level, there shall be no limitations period
applicable to the filing of claims by the claimant for
[[Page S794]]
additional awards for higher disease levels based on the
progression of the non-malignant disease.
(B) Malignant diseases.--Regardless of whether the claimant
has previously filed a claim for compensation for any other
disease level, a claim for compensation for a malignant
disease level shall be filed within 5 years after the
claimant first obtained a medical diagnosis and medical test
results sufficient to satisfy the criteria for the malignant
disease level for which the claimant is seeking compensation.
(2) [Exception.--The statute of limitations in paragraph
(1) does not apply to the progression of nonmalignant
diseases once the initial claim has been filed.]
[(3)] (4) Effect on pending claims.--
(A) In general.--If, on the date of enactment of this Act,
an asbestos claimant has any timely filed asbestos claim that
is preempted under section 403(e), such claimant shall file a
claim under this section within 5 years after such date of
enactment, or any claim relating to that injury, and any
other asbestos claim related to that injury shall be
extinguished, and recovery there shall be prohibited.
(B) Special rule.--For purposes of this paragraph, a claim
shall not be treated as pending with a trust established
under title 11, United States Code, solely because a claimant
whose claim was previously compensated by the trust has or
alleges--
(i) a non-contingent right to the payment of future
installments of a fixed award; or
(ii) a contingent right to recover some additional amount
from the trust on the occurrence of a future event, such as
the reevaluation of the trust's funding adequacy or projected
claims experience.
[(4) Effect of multiple injuries.--
(A) In general.--An asbestos claimant who receives an award
under this title for an eligible disease or condition, and
who subsequently develops another such injury, shall be
eligible for additional awards under this title (subject to
appropriate setoffs for such prior recovery of any award
under this title and from any other collateral source) and
the statute of limitations under paragraph (1) shall not
begin to run with respect to such subsequent injury until
such claimant obtains a medical diagnosis of such other
injury or discovers facts that would have led a reasonable
person to obtain such a diagnosis.
(B) Setoffs.--Except as provided in subparagraph (C), any
amounts paid or to be paid for a prior award under this Act
shall be deducted as a setoff against amounts payable for the
second injury claim.
(C) Exception.--Any amounts paid or to be paid for a prior
claim for a nonmalignant disease (Levels I through V) filed
against the Fund shall not be deducted as a setoff against
amounts payable for the second injury claim for a malignant
disease (Levels VI through IX), unless the malignancy was
diagnosed, or the asbestos claimant had discovered facts that
would have led a reasonable person to obtain such a
diagnosis, before the date on which the nonmalignancy claim
was compensated.]
(c) Required Information.--A claim filed under subsection
(a) shall be in such form, and contain such information in
such detail, as the Administrator shall by regulation
prescribe. At a minimum, a claim shall include--
(1) the name, social security number, gender, date of
birth, and, if applicable, date of death of the claimant;
(2) information relating to the identity of dependents and
beneficiaries of the claimant;
(3) an employment history sufficient to establish required
asbestos exposure, accompanied by social security or other
payment records or a signed release permitting access to such
records;
(4) a description of the asbestos exposure of the claimant,
including, to the extent known, information on the site, or
location of exposure, and duration and intensity of exposure;
(5) a description of the tobacco product use history of the
claimant, including frequency and duration;
(6) an identification and description of the asbestos-
related diseases or conditions of the claimant, accompanied
by a written report by the claimant's physician with medical
diagnoses and x-ray films, and other test results necessary
to establish eligibility for an award under this Act;
(7) a description of any prior or pending civil action or
other claim brought by the claimant for asbestos-related
injury or any other pulmonary, parenchymal, or pleural
injury, including an identification of any recovery of
compensation or damages through settlement, judgment, or
otherwise; and
(8) for any claimant who asserts that he or she is a
nonsmoker or an ex-smoker, as defined in section 131, for
purposes of an award under Malignant Level VI, Malignant
Level VII, or Malignant Level VIII, evidence to support the
assertion of nonsmoking or ex-smoking, including relevant
medical records.
(d) Date of Filing.--A claim shall be considered to be
filed on the date that the claimant mails the claim to the
Office, as determined by postmark, or on the date that the
claim is received by the Office, whichever is the earliest
determinable date.
(e) Incomplete Claims.--If a claim filed under subsection
(a) is incomplete, the Administrator shall notify the
claimant of the information necessary to complete the claim
and inform the claimant of such services as may be available
through the Claimant Assistance Program established under
section 104 to assist the claimant in completing the claim.
Any time periods for the processing of the claim shall be
suspended until such time as the claimant submits the
information necessary to complete the claim. If such
information is not received within 1 year after the date of
such notification, the claim shall be dismissed.
SEC. 114. ELIGIBILITY DETERMINATIONS AND CLAIM AWARDS.
(a) In General.--
(1) Review of claims.--The Administrator shall, in
accordance with this section, determine whether each claim
filed under the Fund or claims facility satisfies the
requirements for eligibility for an award under this Act and,
if so, the value of the award. In making such determinations,
the Administrator shall consider the claim presented by the
claimant, the factual and medical evidence submitted by the
claimant in support of the claim, the medical determinations
of any Physicians Panel to which a claim is referred under
section 121, and the results of such investigation as the
Administrator may deem necessary to determine whether the
claim satisfies the criteria for eligibility established by
this Act.
(2) Additional evidence.--The Administrator may request the
submission of medical evidence in addition to the minimum
requirements of section 113(c) if necessary or appropriate to
make a determination of eligibility for an award, in which
case the cost of obtaining such additional information or
testing shall be borne by the Office.
(b) Proposed Decisions.--Not later than 90 days after the
filing of a claim, the Administrator shall provide to the
claimant (and the claimant's representative) a proposed
decision accepting or rejecting the claim in whole or in part
and specifying the amount of the proposed award, if any. The
proposed decision shall be in writing, shall contain findings
of fact and conclusions of law, and shall contain an
explanation of the procedure for obtaining review of the
proposed decision.
(c) Payments if No Timely Proposed Decision.--If the
Administrator has received a complete claim and has not
provided a proposed decision to the claimant under subsection
(b) within 180 days after the filing of the claim, the claim
shall be deemed accepted and the claimant shall be entitled
to payment under section 133(a)(2). If the Administrator
subsequently rejects the claim the claimant shall receive no
further payments under section 133. If the Administrator
subsequently rejects the claim in part, the Administrator
shall adjust future payments due the claimant under section
133 accordingly. In no event may the Administrator recover
amounts properly paid under this section from a claimant.
(d) Review of Proposed Decisions.--
(1) Right to hearing.--
(A) In general.--Any claimant not satisfied with a proposed
decision of the Administrator under subsection (b) shall be
entitled, on written request made within 90 days after the
date of the issuance of the decision, to a hearing on the
claim of that claimant before a representative of the
Administrator. At the hearing, the claimant shall be entitled
to present oral evidence and written testimony in further
support of that claim.
(B) Conduct of hearing.--When practicable, the hearing will
be set at a time and place convenient for the claimant. In
conducting the hearing, the representative of the
Administrator shall not be bound by common law or statutory
rules of evidence, by technical or formal rules of procedure,
or by section 554 of title 5, United States Code, except as
provided by this Act, but shall conduct the hearing in such
manner as to best ascertain the rights of the claimant. For
this purpose, the representative shall receive such relevant
evidence as the claimant adduces and such other evidence as
the representative determines necessary or useful in
evaluating the claim.
(C) Request for subpoenas.--
(i) In general.--A claimant may request a subpoena but the
decision to grant or deny such a request is within the
discretion of the representative of the Administrator. The
representative may issue subpoenas for the attendance and
testimony of witnesses, and for the production of books,
records, correspondence, papers, or other relevant documents.
Subpoenas are issued for documents only if such documents are
relevant and cannot be obtained by other means, and for
witnesses only where oral testimony is the best way to
ascertain the facts.
(ii) Request.--A claimant may request a subpoena only as
part of the hearing process. To request a subpoena, the
requester shall--
(I) submit the request in writing and send it to the
representative as early as possible, but no later than 30
days after the date of the original hearing request; and
(II) explain why the testimony or evidence is directly
relevant to the issues at hand, and a subpoena is the best
method or opportunity to obtain such evidence because there
are no other means by which the documents or testimony could
have been obtained.
(iii) Fees and mileage.--Any person required by such
subpoena to attend as a witness shall be allowed and paid the
same fees and mileage as are paid witnesses in the district
courts of the United States. Such fees and mileage shall be
paid from the Fund.
(2) Review of written record.--In lieu of a hearing under
paragraph (1), any claimant not satisfied with a proposed
decision of the Administrator shall have the option, on
written request made within 90 days after the date of the
issuance of the decision, of obtaining a review of the
written record by a representative of the Administrator. If
such
[[Page S795]]
review is requested, the claimant shall be afforded an
opportunity to submit any written evidence or argument which
the claimant believes relevant.
(e) Final Decisions.--
(1) In general.--If the period of time for requesting
review of the proposed decision expires and no request has
been filed, or if the claimant waives any objections to the
proposed decision, the Administrator shall issue a final
decision. If such decision materially differs from the
proposed decision, the claimant shall be entitled to review
of the decision under subsection (d).
(2) Time and content.--If the claimant requests review of
all or part of the proposed decision the Administrator shall
issue a final decision on the claim not later than 180 days
after the request for review is received, if the claimant
requests a hearing, or not later than 90 days after the
request for review is received, if the claimant requests
review of the written record. Such decision shall be in
writing and contain findings of fact and conclusions of law.
(f) Representation.--A claimant may authorize an attorney
or other individual to represent him or her in any proceeding
under this Act.
SEC. 115. MEDICAL EVIDENCE AUDITING PROCEDURES.
(a) In General.--
(1) Development.--The Administrator shall develop methods
for auditing and evaluating the medical evidence submitted as
part of [a claim] the claims process. The Administrator may
develop additional methods for auditing and evaluating other
types of evidence or information received by the
Administrator.
(2) Refusal to consider certain evidence.--
(A) In general.--If the Administrator determines that an
audit conducted in accordance with the methods developed
under paragraph (1) demonstrates that the medical evidence
submitted by a specific physician or medical facility is not
consistent with prevailing medical practices or the
applicable requirements of this Act, any medical evidence
from such physician or facility shall be unacceptable for
purposes of establishing eligibility for an award under this
Act.
(B) Notification.--Upon a determination by the
Administrator under subparagraph (A), the Administrator shall
notify the physician or medical facility involved of the
results of the audit. Such physician or facility shall have a
right to appeal such determination under procedures issued by
the Administrator.
(b) Review of Certified B-Readers.--
[(1) In general.--At a minimum, the Administrator shall
prescribe procedures to randomly assign claims for evaluation
by an independent certified B-reader of x-rays submitted in
support of a claim, the cost of which shall be borne by the
Office.]
(1) In General.--The Administrator shall prescribe
procedures to randomly evaluate the x-rays submitted in
support of a statistically significant number of claims by
independent certified B-readers, the cost of which shall be
paid by the Fund.
(2) Disagreement.--If an independent certified B-reader
assigned under paragraph (1) disagrees with the quality
grading or ILO level assigned to an x-ray submitted in
support of a claim, the Administrator shall require a review
of such x-rays by a second independent certified B-reader.
(3) Effect on claim.--If neither certified B-reader under
paragraph (2) agrees with the quality grading and the ILO
grade level assigned to an x-ray as part of the claim, the
Administrator shall take into account the findings of the 2
independent B readers in making the determination on such
claim.
(4) Certified b-readers.--The Administrator shall maintain
a list of a minimum of 50 certified B-readers eligible to
participate in the independent reviews, chosen from all
certified B-readers. When an x-ray is sent for independent
review, the Administrator shall choose the certified B-reader
at random from that list.
(c) Smoking Assessment.--
(1) In general.--
(A) Records and documents.--To aid in the assessment of the
accuracy of claimant representations as to their smoking
status for purposes of determining eligibility and amount of
award under Malignant Level VI, Malignant Level VII, or
Malignant Level VIII, and exceptional medical claims, the
Administrator shall have the authority to obtain relevant
records and documents, including--
(i) records of past medical treatment and evaluation;
(ii) affidavits of appropriate individuals;
(iii) applications for insurance and supporting materials;
and
(iv) employer records of medical examinations.
(B) Consent.--The claimant shall provide consent for the
Administrator to obtain such records and documents where
required.
(2) Review.--The frequency of review of records and
documents submitted under paragraph (1)(A) shall be at the
discretion of the Administrator, but shall address at least 5
percent of the claimants asserting status as nonsmokers or
ex-smokers.
[(3) Consent.--The Administrator may require the
performance of blood tests or any other appropriate medical
test, such as serum cotinine screening, where claimants
assert they are nonsmokers or ex-smokers for purposes of an
award under Malignant Level VI, Malignant Level VII, or
Malignant Level VIII, or as an exceptional medical claim, the
cost of which shall be borne by the Office.]
(3) Consent.--
(A) In general.--The Administrator may require the
performance of blood tests or any other appropriate medical
test, where claimants assert they are nonsmokers or ex-
smokers for purposes of an award under Malignant Level VI,
VII, or VIII, or as an exceptional medical claim, the cost of
which shall be paid by the Fund.
(B) Serum cotinine screening.--The Administrator shall
require the performance of serum cotinine screening on all
claimants who assert they are nonsmokers or ex-smokers for
purposes of an award under Malignant Level VI, VII, or VIII,
or as an exceptional medical claim, the cost of which shall
be paid by the Fund.
(4) Penalty for false statements.--Any false information
submitted under this subsection shall be subject to criminal
prosecution or civil penalties as provided under section 1348
of title 18, United States Code (as added by this Act) and
section 101(c)(2).
(d) Pulmonary Function Testing.--The Administrator shall
develop auditing procedures for pulmonary function test
results submitted as part of a claim, to ensure that such
tests are conducted in accordance with American Thoracic
Society Criteria, as defined under section 121(a)(13).
Subtitle C--Medical Criteria
SEC. 121. MEDICAL CRITERIA REQUIREMENTS.
(a) Definitions.--In this section, the following
definitions shall apply:
(1) Asbestosis determined by pathology.--The term
``asbestosis determined by pathology'' means indications of
asbestosis based on the pathological grading system for
asbestosis described in the Special Issues of the Archives of
Pathology and Laboratory Medicine, ``Asbestos-associated
Diseases'', Vol. 106, No. 11, App. 3 (October 8, 1982).
(2) Bilateral asbestos-related nonmalignant disease.--The
term ``bilateral asbestos-related nonmalignant disease''
means a diagnosis of bilateral asbestos-related nonmalignant
disease based on--
(A) an x-ray reading of 1/0 or higher based on the ILO
grade scale;
(B) bilateral pleural plaques;
(C) bilateral pleural thickening; or
(D) bilateral pleural calcification.
(3) Bilateral pleural disease of b2.--The term ``bilateral
pleural disease of B2'' means a chest wall pleural thickening
or plaque with a maximum width of at least 5 millimeters and
a total length of at least \1/4\ of the projection of the
lateral chest wall.
(4) Certified b-reader.--The term ``certified B-reader''
means an individual who is certified by the National
Institute of Occupational Safety and Health and whose
certification by the National Institute of Occupational
Safety and Health is up to date.
(5) Diffuse pleural thickening.--The term ``diffuse pleural
thickening'' means blunting of either costophrenic angle and
bilateral pleural plaque or bilateral pleural thickening.
(6) DLCO.--The term ``DLCO'' means the single-breath
diffusing capacity of the lung (carbon monoxide) technique
used to measure the volume of carbon monoxide transferred
from the alveoli to blood in the pulmonary capillaries for
each unit of driving pressure of the carbon monoxide.
(7) FEV1.--The term ``FEV1'' means forced expiratory volume
(1 second), which is the maximal volume of air expelled in 1
second during performance of the spirometric test for forced
vital capacity.
(8) FVC.--The term ``FVC'' means forced vital capacity,
which is the maximal volume of air expired with a maximally
forced effort from a position of maximal inspiration.
(9) ILO grade.--The term ``ILO grade'' means the
radiological ratings for the presence of lung changes as
determined from a chest x-ray, all as established from time
to time by the International Labor Organization.
(10) Lower limits of normal.--The term ``lower limits of
normal'' means the fifth percentile of healthy populations as
defined in the American Thoracic Society statement on lung
function testing (Amer. Rev. Resp. Disease 1991, 144:1202-
1218) and any future revision of the same statement.
(11) Nonsmoker.--The term ``nonsmoker'' means a claimant
who--
(A) never smoked; or
(B) has smoked fewer than 100 cigarettes or the equivalent
amount of other tobacco products during the claimant's
lifetime.
(12) PO2.--The term ``PO2'' means the partial
pressure (tension) of oxygen, which measures the amount of
dissolved oxygen in the blood.
(13) Pulmonary function testing.--The term ``pulmonary
function testing'' means spirometry testing that is in
material compliance with the quality criteria established by
the American Thoracic Society and is performed on equipment
which is in material compliance with the standards of the
American Thoracic Society for technical quality and
calibration.
(14) Substantial occupational exposure to asbestos.--
(A) In general.--The term ``substantial occupational
exposure'' means employment in an industry and an occupation
where for a substantial portion of a normal work year for
that occupation, the claimant--
(i) handled raw asbestos fibers;
(ii) fabricated asbestos-containing products so that the
claimant in the fabrication process was exposed to raw
asbestos fibers;
(iii) altered, repaired, or otherwise worked with an
asbestos-containing product such
[[Page S796]]
that the claimant was exposed on a regular basis to asbestos
fibers; or
(iv) worked in close proximity to other workers engaged in
the activities described under clause (i), (ii), or (iii),
such that the claimant was exposed on a regular basis to
asbestos fibers.
(B) Regular basis.--In this paragraph, the term ``on a
regular basis'' means on a frequent or recurring basis.
(15) TLC.--The term ``TLC'' means total lung capacity,
which is the total volume of air in the lung after maximal
inspiration.
(16) Weighted occupational exposure.--
(A) In general.--The term ``weighted occupational
exposure'' means exposure for a period of years calculated
according to the exposure weighting formula under
subparagraphs (B) through (E).
(B) Moderate exposure.--Subject to subparagraph (E), each
year that a claimant's primary occupation, during a
substantial portion of a normal work year for that
occupation, involved working in areas immediate to where
asbestos-containing products were being installed, repaired,
or removed under circumstances that involved regular airborne
emissions of asbestos fibers, shall count as 1 year of
substantial occupational exposure.
(C) Heavy exposure.--Subject to subparagraph (E), each year
that a claimant's primary occupation, during a substantial
portion of a normal work year for that occupation, involved
the direct installation, repair, or removal of asbestos-
containing products such that the person was exposed on a
regular basis to asbestos fibers, shall count as 2 years of
substantial occupational exposure.
(D) Very heavy exposure.--Subject to subparagraph (E), each
year that a claimant's primary occupation, during a
substantial portion of a normal work year for that
occupation, was in primary asbestos manufacturing, a World
War II shipyard, or the asbestos insulation trades, such that
the person was exposed on a regular basis to asbestos fibers,
shall count as 4 years of substantial occupational exposure.
(E) Dates of exposure.--Each year of exposure calculated
under subparagraphs (B), (C), and (D) that occurred before
1976 shall be counted at its full value. Each year from 1976
to 1986 shall be counted as \1/2\ of its value. Each year
after 1986 shall be counted as \1/10\ of its value.
(F) Other claims.--Individuals who do not meet the
provisions of subparagraphs (A) through (E) and believe their
post-1976 or post-1986 exposures exceeded the Occupational
Safety and Health Administration standard may submit
evidence, documentation, work history, or other information
to substantiate noncompliance with the Occupational Safety
and Health Administration standard (such as lack of
engineering or work practice controls, or protective
equipment) such that exposures would be equivalent to
exposures before 1976 or 1986, or to documented exposures in
similar jobs or occupations where control measures had not
been implemented. Claims under this subparagraph shall be
evaluated on an individual basis by a Physicians Panel.
(b) Medical Evidence.--
(1) Latency.--Unless otherwise specified, all diagnoses of
an asbestos-related disease for a level under this section
shall be accompanied by--
(A) a statement by the physician providing the diagnosis
that at least 10 years have elapsed between the date of first
exposure to asbestos or asbestos-containing products and the
diagnosis; or
(B) a history of the claimant's exposure that is sufficient
to establish a 10-year latency period between the date of
first exposure to asbestos or asbestos-containing products
and the diagnosis.
(2) Diagnostic guidelines.--All diagnoses of asbestos-
related diseases shall be based upon--
(A) for disease Levels I through V, in the case of a
claimant who was living at the time the claim was filed--
(i) a physical examination of the claimant by the physician
providing the diagnosis;
(ii) an evaluation of smoking history and exposure history
before making a diagnosis;
(iii) an x-ray reading by a certified B-reader; and
(iv) pulmonary function testing in the case of disease
Levels III, IV, and V;
(B) for disease Levels I through V, in the case of a
claimant who was deceased at the time the claim was filed, a
report from a physician based upon a review of the claimant's
medical records which shall include--
(i) pathological evidence of the nonmalignant asbestos-
related disease; or
(ii) an x-ray reading by a certified B-reader;
(C) for disease Levels VI through IX, in the case of a
claimant who was living at the time the claim was filed--
(i) a physical examination by the claimant's physician
providing the diagnosis; or
(ii) a diagnosis of such a malignant asbestos-related
disease, as described in this section, by a board-certified
pathologist; and
(D) for disease Levels VI through IX, in the case of a
claimant who was deceased at the time the claim was filed--
(i) a diagnosis of such a malignant asbestos-related
disease, as described in this section, by a board-certified
pathologist; and
(ii) a report from a physician based upon a review of the
claimant's medical records.
(3) Credibility of medical evidence.--To ensure the medical
evidence provided in support of a claim is credible and
consistent with recognized medical standards, a claimant
under this title may be required to submit--
(A) x-rays or computerized tomography;
(B) detailed results of pulmonary function tests;
(C) laboratory tests;
(D) tissue samples;
(E) results of medical examinations;
(F) reviews of other medical evidence; and
(G) medical evidence that complies with recognized medical
standards regarding equipment, testing methods, and procedure
to ensure the reliability of such evidence as may be
submitted.
(c) Exposure Evidence.--
(1) In general.--To qualify for any disease level, the
claimant shall demonstrate--
(A) a minimum exposure to asbestos or asbestos-containing
products;
(B) the exposure occurred in the United States, its
territories or possessions, or while a United States citizen,
while an employee of an entity organized under any Federal or
State law regardless of location, or while a United States
citizen while serving on any United States flagged or owned
ship, provided the exposure results from such employment or
service; and
(C) any additional asbestos exposure requirement under this
section.
(2) Proof of exposure.--
(A) Affidavits.--Exposure to asbestos sufficient to satisfy
the exposure requirements for any disease level may be
established by an affidavit of--
(i) the claimant; or
(ii) if the claimant is deceased, a co-worker or a family
member, if the affidavit of the claimant, co-worker, or
family member is found in proceedings under this title to be
reasonably reliable, attesting to the claimant's exposure;
and is credible and is not contradicted by other evidence.
(B) Other proof.--Exposure to asbestos may alternatively be
established by invoices, construction or other similar
records, or any other reasonably reliable evidence.
(3) Take-home exposure.--
(A) In general.--A claimant may alternatively satisfy the
medical criteria requirements of this section where a claim
is filed by a person who alleges their exposure to asbestos
was the result of living with a person who, if the claim had
been filed by that person, would have met the exposure
criteria for the given disease level, and the claimant lived
with such person for the time period necessary to satisfy the
exposure requirement, for the claimed disease level.
(B) Review.--Except for claims for disease Level IX
(mesothelioma), all claims alleging take-home exposure shall
be submitted as an exceptional medical claim under section
121[(f)](g) for review by a Physicians Panel.
(4) Waiver for workers and residents of libby, montana.--
Because of the unique nature of the asbestos exposure related
to the vermiculite mining and milling operations in Libby,
Montana, the Administrator shall waive the exposure
requirements under this subtitle for individuals who worked
at the vermiculite mining and milling facility in Libby,
Montana, or lived or worked within a 20-mile radius of Libby,
Montana, for at least 12 consecutive months before December
31, 2004. Claimants under this section shall provide such
supporting documentation as the Administrator shall require.
(5) Exposure presumptions.--
(A) In general.--The Administrator shall prescribe rules
identifying specific industries, occupations within such
industries, and time periods in which workers employed in
those industries or occupations typically had substantial
occupational exposure to asbestos as defined under section
121(a). Until 5 years after the Administrator certifies that
the Fund is paying claims at a reasonable rate, the
industries, occupations and time periods identified by the
Administrator shall at a minimum include those identified in
the 2002 Trust Distribution Process of the Manville Personal
Injury Settlement Trust as of January 1, 2005, as industries,
occupations and time periods in which workers were presumed
to have had significant occupational exposure to asbestos.
Thereafter, the Administrator may by rule modify or eliminate
those exposure presumptions required to be adopted from the
Manville Personal Injury Settlement Trust, if there is
evidence that demonstrates that the typical exposure for
workers in such industries and occupations during such time
periods did not constitute substantial occupational exposure
in asbestos.
(B) Claimants entitled to presumptions.--Any claimant who
demonstrates through meaningful and credible evidence that
such claimant was employed during relevant time periods in
industries or occupations identified under subparagraph (A)
shall be entitled to a presumption that the claimant had
substantial occupational exposure to asbestos during those
time periods. That presumption shall not be conclusive, and
the Administrator may find that the claimant does not have
substantial occupational exposure if other information
demonstrates that the claimant did not in fact have
substantial occupational exposure during any part of the
relevant time periods.
(C) Criteria requirements.--Nothing in subparagraphs (A) or
(B) shall negate the exposure or medical criteria
requirements in section 121, for the purpose of receiving
compensation from the Fund.
(6) Penalty for false statement.--Any false information
submitted under this subsection shall be subject to section
1348 of
[[Page S797]]
title 18, United States Code (as added by this Act).
(d) Asbestos Disease Levels.--
(1) Nonmalignant level i.--To receive Level I compensation,
a claimant shall provide--
(A) a diagnosis of bilateral asbestos-related nonmalignant
disease; and
(B) evidence of 5 years cumulative occupational exposure to
asbestos.
(2) Nonmalignant level ii.--To receive Level II
compensation, a claimant shall provide--
(A) a diagnosis of bilateral asbestos-related nonmalignant
disease with ILO grade of 1/1 or greater, and showing small
irregular opacities of shape or size, either ss, st, or tt,
and present in both lower lung zones, or asbestosis
determined by pathology, or blunting of either costophrenic
angle and bilateral pleural plaque or bilateral pleural
thickening of at least grade B2 or greater, or bilateral
pleural disease of grade B2 or greater;
(B) evidence of TLC less than 80 percent or FVC less than
the lower limits of normal, and FEV1/FVC ratio less than 65
percent;
(C) evidence of 5 or more weighted years of substantial
occupational exposure to asbestos; and
(D) supporting medical documentation, such as a written
opinion by the examining or diagnosing physician, according
to the diagnostic guidelines in section 121(b)(2),
establishing asbestos exposure as a substantial contributing
factor in causing the pulmonary condition in question.
(3) Nonmalignant level iii.--To receive Level III
compensation a claimant shall provide--
(A) a diagnosis of bilateral asbestos-related nonmalignant
disease with ILO grade of 1/0 or greater and showing small
irregular opacities of shape or size, either ss, st, or tt,
and present in both lower lung zones, or asbestosis
determined by pathology, or diffuse pleural thickening, or
bilateral pleural disease of B2 or greater;
(B) evidence of TLC less than 80 percent, FVC less than the
lower limits of normal and FEV1/FVC ratio greater than or
equal to 65 percent, or evidence of a decline in FVC of 20
percent or greater, after allowing for the expected decrease
due to aging, and an FEV1/FVC ratio greater than or equal to
65 percent documented with a second spirometry;
(C) evidence of 5 or more weighted years of substantial
occupational exposure to asbestos; and
(D) supporting medical documentation, such as a written
opinion by the examining or diagnosing physician, according
to the diagnostic guidelines in section 121(b)(2)--
(i) establishing asbestos exposure as a substantial
contributing factor in causing the pulmonary condition in
question; and
(ii) excluding other more likely causes of that pulmonary
condition.
(4) Nonmalignant level iv.--To receive Level IV
compensation a claimant shall provide--
(A) diagnosis of bilateral asbestos-related nonmalignant
disease with ILO grade of 1/1 or greater and showing small
irregular opacities of shape or size, either ss, st, or tt,
and present in both lower lung zones, or asbestosis
determined by pathology, or diffuse pleural thickening, or
bilateral pleural disease of B2 or greater;
(B) evidence of TLC less than 60 percent or FVC less than
60 percent, and FEV1/FVC ratio greater than or equal to 65
percent;
(C) evidence of 5 or more weighted years of substantial
occupational exposure to asbestos before diagnosis; and
(D) supporting medical documentation, such as a written
opinion by the examining or diagnosing physician, according
to the diagnostic guidelines in section 121(b)(2)--
(i) establishing asbestos exposure as a substantial
contributing factor in causing the pulmonary condition in
question; and
(ii) excluding other more likely causes of that pulmonary
condition.
(5) Nonmalignant level v.--To receive Level V compensation
a claimant shall provide--
(A) diagnosis of bilateral asbestos-related nonmalignant
disease with ILO grade of 1/1 or greater and showing small
irregular opacities of shape or size, either ss, st, or tt,
and present in both lower lung zones, or asbestosis
determined by pathology, or diffuse pleural thickening, or
bilateral pleural disease of B2 or greater;
(B)(i) evidence of TLC less than 50 percent or FVC less
than 50 percent, and FEV1/FVC ratio greater than or equal to
65 percent;
(ii) DLCO less than 40 percent of predicted, plus a FEV1/
FVC ratio not less than 65 percent; or
(iii) PO2 less than 55 mm/Hg, plus a FEV1/FVC
ratio not less than 65 percent;
(C) evidence of 5 or more weighted years of substantial
occupational exposure to asbestos; and
(D) supporting medical documentation, such as a written
opinion by the examining or diagnosing physician, according
to the diagnostic guidelines in section 121(b)(2)--
(i) establishing asbestos exposure as a substantial
contributing factor in causing the pulmonary condition in
question; and
(ii) excluding other more likely causes of that pulmonary
condition.
(6) Malignant level vi.--
(A) In general.--To receive Level VI compensation a
claimant shall provide--
(i) a diagnosis of a primary colorectal, laryngeal,
esophageal, pharyngeal, or stomach cancer on the basis of
findings by a board certified pathologist;
(ii) evidence of a bilateral asbestos-related nonmalignant
disease;
(iii) evidence of 15 or more weighted years of substantial
occupational exposure to asbestos; and
(iv) supporting medical documentation, such as a written
opinion by the examining or diagnosing physician, according
to the diagnostic guidelines in section 121(b)(2),
establishing asbestos exposure as a substantial contributing
factor in causing the cancer in question.
(B) Referral to physicians panel.--All claims filed with
respect to Level VI under this paragraph shall be referred to
a Physicians Panel for a determination that it is more
probable than not that asbestos exposure was a substantial
contributing factor in causing the other cancer in question.
If the claimant meets the requirements of subparagraph (A),
there shall be a presumption of eligibility for the scheduled
value of compensation unless there is evidence determined by
the Physicians Panel that rebuts that presumption. In making
its determination under this subparagraph, the Physicians
Panel shall consider the intensity and duration of exposure,
smoking history, and the quality of evidence relating to
exposure and smoking. Claimants shall bear the burden of
producing meaningful and credible evidence of their smoking
history as part of their claim submission.
(7) Malignant level vii.--
(A) In general.--To receive Level VII compensation, a
claimant shall provide--
(i) a diagnosis of a primary lung cancer disease on the
basis of findings by a board certified pathologist;
(ii) evidence of bilateral pleural plaques or bilateral
pleural thickening or bilateral pleural calcification by
chest x-ray or such diagnostic methodology supported by the
findings of the Institute of Medicine under subsection (f);
(iii) evidence of 12 or more weighted years of substantial
occupational exposure to asbestos; and
(iv) supporting medical documentation, such as a written
opinion by the examining or diagnosing physician, according
to the diagnostic guidelines in section 121(b)(2),
establishing asbestos exposure as a substantial contributing
factor in causing the lung cancer in question.
(B) Physicians panel.--A claimant filing a claim relating
to Level VII under this paragraph may request that the claim
be referred to a Physicians Panel for a determination of
whether the claimant qualifies for the disease category and
relevant smoking status. In making its determination under
this subparagraph, the Physicians Panel shall consider the
intensity and duration of exposure, smoking history, and the
quality of evidence relating to exposure and smoking.
Claimants shall bear the burden of producing meaningful and
credible evidence of their smoking history as part of their
claim submission.
(8) Malignant level viii.--
(A) In general.--To receive Level VIII compensation, a
claimant shall provide a diagnosis--
(i) of a primary lung cancer disease on the basis of
findings by a board certified pathologist;
(ii)(I) of--
(aa) asbestosis based on a chest x-ray of at least 1/0 on
the ILO scale and showing small irregular opacities of shape
or size, either ss, st, or tt, and present in both lower lung
zones; and
(bb) 10 or more weighted years of substantial occupational
exposure to asbestos;
(II) of--
(aa) asbestosis based on a chest x-ray of at least 1/1 on
the ILO scale and showing small irregular opacities of shape
or size, either ss, st, or tt, and present in both lower lung
zones; and
(bb) 8 or more weighted years of substantial occupational
exposure to asbestos;
(III) asbestosis determined by pathology and 10 or more
weighted years of substantial occupational exposure to
asbestos; or
(IV) asbestosis as determined by CT Scan, the cost of which
shall not be borne by the Fund. The CT Scan must be
interpreted by a board certified radiologist and confirmed by
a board certified radiologist; and
(iii) supporting medical documentation, such as a written
opinion by the examining or diagnosing physician, according
to the diagnostic guidelines in section 121(b)(2),
establishing asbestos exposure as a substantial contributing
factor in causing the lung cancer in question; and 10 or more
weighted years of substantial occupational exposure to
asbestos.
(B) Physicians panel.--A claimant filing a claim with
respect to Level VIII under this paragraph may request that
the claim be referred to a Physicians Panel for a
determination of whether the claimant qualifies for the
disease category and relevant smoking status. In making its
determination under this subparagraph, the Physicians Panel
shall consider the intensity and duration of exposure,
smoking history, and the quality of evidence relating to
exposure and smoking. Claimants shall bear the burden of
producing meaningful and credible evidence of their smoking
history as part of their claim submission.
(9) Malignant level ix.--To receive Level IX compensation,
a claimant shall provide--
(A) a diagnosis of malignant mesothelioma disease on the
basis of findings by a board certified pathologist; and
(B) credible evidence of identifiable exposure to asbestos
resulting from--
(i) occupational exposure to asbestos;
[[Page S798]]
(ii) exposure to asbestos fibers brought into the home of
the claimant by a worker occupationally exposed to asbestos;
(iii) exposure to asbestos fibers resulting from living or
working in the proximate vicinity of a factory, shipyard,
building demolition site, or other operation that regularly
released asbestos fibers into the air due to operations
involving asbestos at that site; or
(iv) other identifiable exposure to asbestos fibers, in
which case the claim shall be reviewed by a Physicians Panel
under [section 121(f)] subsection (g) for a determination of
eligibility.
(e) Institute of Medicine Study.--Not later than April 1,
2006, the Institute of Medicine of the National Academy of
Sciences shall complete a study contracted with the National
Institutes of Health [of the] to determine whether there is a
causal link between asbestos exposure and other cancers,
including colorectal, laryngeal, esophageal, pharyngeal, and
stomach cancers, except for mesothelioma and lung cancers.
The Institute of Medicine shall issue a report on its
findings on causation, which shall be transmitted to
Congress, the Administrator, the Advisory Committee on
Asbestos Disease Compensation or the Medical Advisory
Committee, and the Physicians Panels. The Institute of
Medicine report shall be binding on the Administrator and the
Physicians Panels for purposes of determining whether
asbestos exposure is a substantial contributing factor [under
section 121(d)(6)(B).] in causing the other cancerous disease
in question under subsection (d)(6). If asbestos is not a
substantial contributing factor to the particular cancerous
disease under subsection (d)(6), subsection (d)(6) shall not
apply with respect to that disease and no claim may be filed
with, or award paid from, the Fund with respect to that
disease under malignant Level VI.
(f) Institute of Medicine Study on CT Scans.--
(1) In general.--Not later than April 1, 2006, the
Institute of Medicine of the National Academy of Sciences
shall complete a study contracted with the National
Institutes of Health of the use of CT scans as a diagnostic
tool for bilateral pleural plaques, bilateral pleural
thickening, or bilateral pleural calcification.
(2) Findings.--The Institute of Medicine shall make and
issue findings based on the study required under paragraph
(1) on whether--
(A) CT scans are generally accepted in the medical
profession to detect bilateral pleural plaques, bilateral
pleural thickening, or bilateral pleural calcification; and
(B) professional standards of practice exist to allow for
the Administrator's reasonable reliance on such as evidence
of bilateral pleural plaques, bilateral pleural thickening,
or bilateral pleural calcification under the Fund.
(3) Report.--The Institute of Medicine shall issue a report
on the findings required under paragraph (2), which shall be
transmitted to Congress, the Administrator, the Advisory
Committee on Asbestos Disease Compensation or the Medical
Advisory Committee, and the Physicians Panels.
(4) Report binding on the administrator.--The Institute of
Medicine report required under paragraph (3) shall be binding
on the Administrator and the Physicians Panels for purposes
of determining reliable and acceptable evidence that may be
submitted for a Level VII claim under subsection (d)(7).
[(f)](g) Exceptional Medical Claims.--
(1) In general.--A claimant who does not meet the medical
criteria requirements under this section may apply for
designation of the claim as an exceptional medical claim.
(2) Application.--When submitting an application for review
of an exceptional medical claim, the claimant shall--
(A) state that the claim does not meet the medical criteria
requirements under this section; or
(B) seek designation as an exceptional medical claim within
60 days after a determination that the claim is ineligible
solely for failure to meet the medical criteria requirements
under subsection (d).
(3) Report of physician.--
(A) In general.--Any claimant applying for designation of a
claim as an exceptional medical claim shall support an
application filed under paragraph (1) with a report from a
physician meeting the requirements of this section.
(B) Contents.--A report filed under subparagraph (A) shall
include--
(i) a complete review of the claimant's medical history and
current condition;
(ii) such additional material by way of analysis and
documentation as shall be prescribed by rule of the
Administrator; and
(iii) a detailed explanation as to why the claim meets the
requirements of paragraph (4)(B).
(4) Review.--
(A) In general.--The Administrator shall refer all
applications and supporting documentation submitted under
paragraph (2) to a Physicians Panel for review for
eligibility as an exceptional medical claim.
(B) Standard.--A claim shall be designated as an
exceptional medical claim if the claimant, for reasons beyond
the control of the claimant, cannot satisfy the requirements
under this section, but is able, through comparably reliable
evidence that meets the standards under this section, to show
that the claimant has an asbestos-related condition that is
substantially comparable to that of a medical condition that
would satisfy the requirements of a category under this
section.
(C) Additional information.--A Physicians Panel may request
additional reasonable testing to support the claimant's
application.
(D) CT scan.--A claimant may submit a CT Scan in addition
to an x-ray.
(5) Approval.--
(A) In general.--If the Physicians Panel determines that
the medical evidence is sufficient to show a comparable
asbestos-related condition, it shall issue a certificate of
medical eligibility designating the category of asbestos-
related injury under this section for which the claimant
shall be eligible to seek compensation.
(B) Referral.--Upon the issuance of a certificate under
subparagraph (A), the Physicians Panel shall submit the claim
to the Administrator, who shall give due consideration to the
recommendation of the Physicians Panel in determining whether
the claimant meets the requirements for compensation under
this Act.
(6) Resubmission.--Any claimant whose application for
designation as an exceptional medical claim is rejected may
resubmit an application if new evidence becomes available.
The application shall identify any prior applications and
state the new evidence that forms the basis of the
resubmission.
(7) Rules.--The Administrator shall promulgate rules
governing the procedures for seeking designation of a claim
as an exceptional medical claim.
(8) Libby, montana.--
(A) In general.--A Libby, Montana[,] claimant may elect to
have the claimant's claims designated as exceptional medical
claims and referred to a Physicians Panel for review. In
reviewing the medical evidence submitted by a Libby, Montana
claimant in support of that claim, the Physicians Panel shall
take into consideration the unique and serious nature of
asbestos exposure in Libby, Montana, including the nature of
the pleural disease related to asbestos exposure in Libby,
Montana.
(B) Claims.--For all claims for Levels II through IV filed
by Libby, Montana claimants, as described under subsection
(c)(4), once the Administrator or the Physicians Panel issues
a certificate of medical eligibility to a Libby, Montana
claimant, and notwithstanding the disease category designated
in the certificate or the eligible disease or condition
established in accordance with this section, or the value of
the award determined in accordance with section 114, the
Libby, Montana claimant shall be entitled to an award that is
not less than that awarded to claimants who suffer from
asbestosis, Level IV. For all malignant claims filed by
Libby, Montana claimants, the Libby, Montana claimant shall
be entitled to an award that corresponds to the malignant
disease category designated by the Administrator or the
Physicians Panel.
(C) Evaluation of claims.--For purposes of evaluating
exceptional medical claims from Libby, Montana, a claimant
shall be deemed to have a comparable asbestos-related
condition to an asbestos disease category Level IV, and shall
be deemed to qualify for compensation at Level IV, if the
claimant provides--
(i) a diagnosis of bilateral asbestos related nonmalignant
disease;
(ii) evidence of TLC or FVC less than 80 percent; and
(iii) supporting medical documentation establishing
asbestos exposure as a substantial contributing factor in
causing the pulmonary condition in question, and excluding
more likely causes of that pulmonary condition.
(9) Study of vermiculite processing facilities.--
(A) In general.--As part of the ongoing National Asbestos
Exposure Review (in this section referred to as ``NAER'')
being conducted by the Agency for Toxic Substances and
Disease Registry (in this section referred to as ``ATSDR'')
of facilities that received vermiculite ore from Libby,
Montana, the ATSDR shall conduct a study of all Phase 1 sites
where--
(i) the Environmental Protection Agency has mandated
further action at the site on the basis of current
contamination; or
(ii) the site was an exfoliation facility that processed
roughly 100,000 tons or more of vermiculite from the Libby
mine.
(B) Study by ATSDR.--The study by the ATSDR shall evaluate
the facilities identified under subparagraph (A) and
compare--
(i) the levels of asbestos emissions from such facilities;
(ii) the resulting asbestos contamination in areas
surrounding such facilities;
(iii) the levels of exposure to residents living in the
vicinity of such facilities;
(iv) the risks of asbestos-related disease to the residents
living in the vicinity of such facilities; and
(v) the risk of asbestos-related mortality to residents
living in the vicinity of such facilities,
to the emissions, contamination, exposures, and risks
resulting from the mining of vermiculite ore in Libby,
Montana.
(C) Results of study.--The results of the study required
under this paragraph shall be transmitted to the
Administrator. If the ATSDR finds as a result of such study
that, for any particular facility, the levels of emissions
from, the resulting contamination caused by, the levels of
exposure to nearby residents from, and the risks of asbestos-
related disease and asbestos-related mortality to nearby
residents from such facility are substantially equivalent to
those of Libby, Montana, then the Administrator shall treat
claims from residents surrounding such facilities the same as
claims of residents of Libby, Montana, and such residents
shall have all the rights of residents of Libby, Montana,
under this Act. As part of the results of its study, the
ATSDR shall prescribe for any such facility the relevant
geographic and temporal criteria under which the exposures
and risks to the surrounding residents are substantially
equivalent
[[Page S799]]
to those of residents of Libby, Montana, and therefore
qualify for treatment under this paragraph.
(10) Naturally occurring asbestos.--A claimant who has been
exposed to naturally occurring asbestos may file an
exceptional medical claim with the Fund.
(h) Guidelines for CT Scans.--The Administrator shall
commission the American College of Radiology to develop, in
consultation with the American Thoracic Society, American
College of Chest Physicians, and Institute of Medicine,
guidelines and a methodology for the use of CT scans as a
diagnostic tool for bilateral pleural plaques, bilateral
pleural thickening, or bilateral pleural calcification under
the Fund. After development, such guidelines and methodology
shall be used for diagnostic purposes under the Fund.
Subtitle D--Awards
SEC. 131. AMOUNT.
(a) In General.--An asbestos claimant who meets the
requirements of section 111 shall be entitled to an award in
an amount determined by reference to the benefit table and
the matrices developed under subsection (b).
(b) Benefit Table.--
(1) In general.--An asbestos claimant with an eligible
disease or condition established in accordance with section
121 shall be eligible for an award as determined under this
subsection. The award for all asbestos claimants with an
eligible disease or condition established in accordance with
section 121 shall be according to the following schedule:
LevScheduled Condition or Scheduled Value
Disease
I Asbestosis/Pleural Medical Monitoring
Disease A
II Mixed Disease With $25,000
Impairment
III Asbestosis/Pleural $100,000
Disease B
IV Severe Asbestosis $400,000
V Disabling Asbestosis $850,000
VI Other Cancer $200,000
VII Lung Cancer With smokers, $300,000;
Pleural Disease ex-smokers, $725,000;
non-smokers, $800,000
VIII Lung Cancer With smokers, $600,000;
Asbestosis ex-smokers, $975,000; non-
smokers, $1,100,000
IX Mesothelioma $1,100,000
(2) Definitions.--In this section--
(A) the term ``nonsmoker'' means a claimant who--
(i) never smoked; or
(ii) has smoked fewer than 100 cigarettes or the equivalent
of other tobacco products during the claimant's lifetime; and
(B) the term ``ex-smoker'' means a claimant who has not
smoked during any portion of the 12-year period preceding the
diagnosis of lung cancer.
(3) Level ix adjustments.--
(A) In general.--If the Administrator determines that the
impact of all adjustments under this paragraph on the Fund is
cost neutral, the Administrator may--
(i) increase awards for Level IX claimants who are less
than 51 years of age with dependent children; and
(ii) decrease awards for Level IX claimants who are at
least 65 years of age, but in no case shall an award for
Level IX be less than $1,000,000.
(B) Implementation.--Before making adjustments under this
paragraph, the Administrator shall publish in the Federal
Register notice of, and a plan for, making such adjustments.
(4) Special adjustment for fela cases.--
(A) In general.--A claimant who would be eligible to bring
a claim under the Act of April 22, 1908 (45 U.S.C. 51 et
seq.), commonly known as the Employers' Liability Act, but
for section 403 of this Act, shall be eligible for a special
adjustment under this paragraph.
(B) Regulations.--
(i) In general.--Not later than 90 days after the date of
enactment of this Act, the Administrator shall promulgate
regulations relating to special adjustments under this
paragraph.
(ii) Joint proposal.--Not later than 45 days after the date
of enactment of this Act, representatives of railroad
management and representatives of railroad labor shall submit
to the Administrator a joint proposal for regulations
describing the eligibility for and amount of special
adjustments under this paragraph. If a joint proposal is
submitted, the Administrator shall promulgate regulations
that reflect the joint proposal.
(iii) Absence of joint proposal.--If railroad management
and railroad labor are unable to agree on a joint proposal
within 45 days after the date of enactment of this Act, the
benefits prescribed in subparagraph (E) shall be the benefits
available to claimants, and the Administrator shall
promulgate regulations containing such benefits.
(iv) Review.--The parties participating in the arbitration
may file in the United States District Court for the District
of Columbia a petition for review of the Administrator's
order. The court shall have jurisdiction to affirm the order
of the Administrator, or to set it aside, in whole or in
part, or it may remand the proceedings to the Administrator
for such further action as it may direct. On such review, the
findings and order of the Administrator shall be conclusive
on the parties, except that the order of the Administrator
may be set aside, in whole or in parts or remanded to the
Administrator, for failure of the Administrator to comply
with the requirements of this section, for failure of the
order to conform, or confine itself, to matters within the
scope of the Administrator's jurisdiction, or for fraud or
corruption.
(C) Eligibility.--An individual eligible to file a claim
under the Act of April 22, 1908 (45 U.S.C. 51 et seq.),
commonly known as the Employers' Liability Act, shall be
eligible for a special adjustment under this paragraph if
such individual meets the criteria set forth in subparagraph
(F).
(D) Amount.--
(i) In general.--The amount of the special adjustment shall
be based on the type and severity of asbestos disease, and
shall be 110 percent of the average amount an injured
individual with a disease caused by asbestos, as described in
section 121(d) of this Act, would have received, during the
5-year period before the enactment of this Act, adjusted for
inflation. This adjustment shall be in addition to any other
award for which the claimant is eligible under this Act. The
amount of the special adjustment shall be reduced by an
amount reasonably calculated to take into account all
expenses of litigation normally borne by plaintiffs,
including attorney's fees.
(ii) Limitation.--The amount under clause (i) may not
exceed the amount the claimant is eligible to receive before
applying the special adjustment under that clause.
(E) Arbitrated benefits.--If railroad management and
railroad labor are unable to agree on a joint proposal within
45 days after the date of enactment of this Act, the
Administrator shall appoint an arbitrator to determine the
benefits under subparagraph (D). The Administrator shall
appoint an arbitrator who shall be acceptable to both
railroad management and railroad labor. Railroad management
and railroad labor shall each designate their representatives
to participate in the arbitration. The arbitrator shall
submit the benefits levels to the Administrator not later
than 30 days after appointment and such benefits levels shall
be based on information provided by rail labor and rail
management. The information submitted to the arbitrator by
railroad management and railroad labor shall be considered
confidential and shall be disclosed to the other party upon
execution of an appropriate confidentiality agreement. Unless
the submitting party provides written consent, neither the
arbitrator nor either party to the arbitration shall divulge
to any third party any information or data, in any form,
submitted to the arbitrator under this section. Nor shall
either party use such information or data for any purpose
other than participation in the arbitration proceeding, and
each party shall return to the other any information it has
received from the other party as soon the arbitration is
concluded. Information submitted to the arbitrator may not be
admitted into evidence, nor discovered, in any civil
litigation in Federal or State court. The nature of the
information submitted to the arbitrator shall be within the
sole discretion of the submitting party, and the arbitrator
may not require a party to submit any particular information,
including information subject to a prior confidentiality
agreement.
(F) Demonstration of eligibility.--
(i) In general.--A claimant under this paragraph shall be
required to demonstrate--
(I) employment of the claimant in the railroad industry;
(II) exposure of the claimant to asbestos as part of that
employment; and
(III) the nature and severity of the asbestos-related
injury.
(ii) Medical criteria.--In order to be eligible for a
special adjustment a claimant shall meet the criteria set
forth in section 121 that would qualify a claimant for a
payment under Level II or greater.
(5) Medical monitoring.--An asbestos claimant with
asymptomatic exposure, based on the criteria under section
121(d)(1), shall only be eligible for medical monitoring
reimbursement as provided under section 132.
(6) Cost-of-living adjustment.--
(A) In general.--Beginning January 1, 2007, award amounts
under paragraph (1) shall be annually increased by an amount
equal to such dollar amount multiplied by the cost-of-living
adjustment, rounded to the nearest $1,000 increment.
(B) Calculation of cost-of-living adjustment.--For the
purposes of subparagraph (A), the cost-of-living adjustment
for any calendar year shall be the percentage, if any, by
which the consumer price index for the succeeding calendar
year exceeds the consumer price index for calendar year 2005.
(C) Consumer price index.--
(i) In general.--For the purposes of subparagraph (B), the
consumer price index for any calendar year is the average of
the consumer price index as of the close of the 12-month
period ending on August 31 of such calendar year.
(ii) Definition.--For purposes of clause (i), the term
``consumer price index'' means the consumer price index
published by the Department of Labor. The consumer price
index series to be used for award escalations shall include
the consumer price index used for all-urban consumers, with
an area coverage of the United States city average, for all
items, based on the 1982-1984 index based period, as
published by the Department of Labor.
SEC. 132. MEDICAL MONITORING.
(a) Relation to Statute of Limitations.--The filing of a
claim under this Act that
[[Page S800]]
seeks reimbursement for medical monitoring shall not be
considered as evidence that the claimant has discovered facts
that would otherwise commence the period applicable for
purposes of the statute of limitations under section 113(b).
(b) Costs.--Reimbursable medical monitoring costs shall
include the costs of a claimant not covered by health
insurance for an examination by the claimant's physician, x-
ray tests, and pulmonary function tests every 3 years.
(c) Regulations.--The Administrator shall promulgate
regulations that establish--
(1) the reasonable costs for medical monitoring that is
reimbursable; and
(2) the procedures applicable to asbestos claimants.
SEC. 133. PAYMENT.
(a) Structured Payments.--
(1) In general.--An asbestos claimant who is entitled to an
award should receive the amount of the award through
structured payments from the Fund, made over a period of 3
years, and in no event more than 4 years after the date of
final adjudication of the claim.
(2) Payment period and amount.--There shall be a
presumption that any award paid under this subsection shall
provide for payment of--
(A) 40 percent of the total amount in year 1;
(B) 30 percent of the total amount in year 2; and
(C) 30 percent of the total amount in year 3.
(3) Extension of payment period.--
(A) In general.--The Administrator shall develop guidelines
to provide for the payment period of an award under
subsection (a) to be extended to a 4-year period if such
action is warranted in order to preserve the overall solvency
of the Fund. Such guidelines shall include reference to the
number of claims made to the Fund and the awards made and
scheduled to be paid from the Fund as provided under section
405.
(B) Limitations.--In no event shall less than 50 percent of
an award be paid in the first 2 years of the payment period
under this subsection.
(4) [Accelerated] Lump-sum payments.--
(A) In general.--The Administrator shall develop guidelines
to provide for [accelerated payments] 1 lump-sum payment to
asbestos claimants who are mesothelioma victims and who are
alive on the date on which the Administrator receives notice
of the eligibility of the claimant. [Such payments shall be
credited against the first regular payment under the
structured payment plan for the claimant.]
(B) Timing of payments.--Lump-sum payments shall be made
within the shorter of--
(i) not later than 30 days after the date the claim is
approved by the Administrator; or
(ii) not later than 6 months after the date the claim is
filed.
(C) Timing of payments to be adjusted with respect to
solvency of the fund.--If the Administrator determines that
solvency of the Fund would be severely harmed by the timing
of the payments required under subparagraph (B), the time for
such payments may be extended to the shorter of--
(i) not later than 6 months after the date the claim is
approved by the Administrator; or
(ii) not later than 11 months after the date the claim is
filed.
(5) Expedited payments.--
(A) In general.--The Administrator shall develop guidelines
to provide for expedited payments to asbestos claimants in
cases of exigent [circumstances or extreme hardship caused by
asbestos-related injury.] health claims as described under
section 106(c)(2)(B) and (C).
(B) Timing of payments.--Total payments shall be made
within the shorter of--
(i) not later than 6 months after the date the claim is
approved by the Administrator; or
(ii) not later than 1 year after the date the claim is
filed.
(C) Timing of payments to be adjusted with respect to
solvency of the fund.-- If the Administrator determines that
solvency of the Fund would be severely harmed by the timing
of the payments required under subparagraph (B), the time for
such payments may be extended to the shorter of--
(i) not later than 1 year after the date the claim is
approved by the Administrator; or
(ii) not later than 2 years after the date the claim is
filed.
(6) Annuity.--An asbestos claimant may elect to receive any
payments to which that claimant is entitled under this title
in the form of an annuity.
(b) Limitation on Transferability.--A claim filed under
this Act shall not be assignable or otherwise transferable
under this Act.
(c) Creditors.--An award under this title shall be exempt
from all claims of creditors and from levy, execution, and
attachment or other remedy for recovery or collection of a
debt, and such exemption may not be waived.
(d) Medicare as Secondary Payer.--No award under this title
shall be deemed a payment for purposes of section 1862 of the
Social Security Act (42 U.S.C. 1395y).
(e) Exempt Property in Asbestos Claimant's Bankruptcy
Case.--If an asbestos claimant files a petition for relief
under section 301 of title 11, United States Code, no award
granted under this Act shall be treated as property of the
bankruptcy estate of the asbestos claimant in accordance with
section 541(b)(6) of title 11, United States Code.
(f) Effect of Payment.--The full payment of an asbestos
claim under this section shall be in full satisfaction of
such claim and shall be deemed to operate as a release to
such claim. No claimant with an asbestos claim that has been
fully paid under this section may proceed in the tort system
with respect to such claim.
SEC. 134. [REDUCTION IN BENEFIT PAYMENTS FOR COLLATERAL
SOURCES.] SETOFFS FOR COLLATERAL SOURCE
COMPENSATION AND PRIOR AWARDS.
(a) In General.--The amount of an award otherwise available
to an asbestos claimant under this title shall be reduced by
the amount of any collateral source compensation and by any
amounts paid or to be paid to the claimant for a prior award
under this Act.
(b) Exclusions.--
(1) Collateral source compensation.--In no case shall
statutory benefits under workers' compensation laws, special
adjustments made under section 131(b)(3), occupational or
total disability benefits under the Railroad Retirement Act
(45 U.S.C. 201 et seq.), sickness benefits under the Railroad
Unemployment Insurance Act (45 U.S.C 351 et seq.), and
veterans' benefits programs be deemed as collateral source
compensation for purposes of this section.
(2) Prior award payments.--Any amounts paid or to be paid
for a prior claim for a nonmalignant disease (Levels I
through V) filed against the Fund shall not be deducted as a
setoff against amounts payable for the second injury claims
for a malignant disease (Levels VI through IX), unless the
malignancy was diagnosed before the date on which the
nonmalignancy claim was compensated.
SEC. 135. CERTAIN CLAIMS NOT AFFECTED BY PAYMENT OF AWARDS.
(a) In General.--The payment of an award under section 106
or 133 shall not be considered a form of compensation or
reimbursement for a loss for purposes of imposing liability
on any asbestos claimant receiving such payment to repay
any--
(1) insurance carrier for insurance payments; or
(2) person or governmental entity on account of worker's
compensation, health care, or disability payments.
(b) No Effect on Claims.--The payment of an award to an
asbestos claimant under section 106 or 133 shall not affect
any claim of an asbestos claimant against--
(1) an insurance carrier with respect to insurance; or
(2) against any person or governmental entity with respect
to worker's compensation, healthcare, or disability.
TITLE II--ASBESTOS INJURY CLAIMS RESOLUTION FUND
Subtitle A--Asbestos Defendants Funding Allocation
SEC. 201. DEFINITIONS.
In this subtitle, the following definitions shall apply:
(1) Affiliated group.--The term ``affiliated group''--
(A) means a defendant participant that is an ultimate
parent and any person whose entire beneficial interest is
directly or indirectly owned by that ultimate parent on the
date of enactment of this Act; and
(B) shall not include any person that is a debtor or any
direct or indirect majority-owned subsidiary of a debtor.
(2) Class action trust.--The term ``class action trust''
means a trust or similar entity established to hold assets
for the payment of asbestos claims asserted against a debtor
or participating defendant, under a settlement that--
(A) is a settlement of class action claims under rule 23 of
the Federal Rules of Civil Procedure; and
(B) has been approved by a final judgment of a United
States district court before the date of enactment of this
Act.
(3) Debtor.--The term ``debtor''--
(A) means--
(i) a person that is subject to a case pending under a
chapter of title 11, United States Code, on the date of
enactment of this Act or at any time during the 1-year period
immediately preceding that date, irrespective of whether the
debtor's case under that title has been dismissed; and
(ii) all of the direct or indirect majority-owned
subsidiaries of a person described under clause (i),
regardless of whether any such majority-owned subsidiary has
a case pending under title 11, United States Code; and
(B) shall not include an entity--
(i) subject to chapter 7 of title 11, United States Code,
if a final decree closing the estate shall have been entered
before the date of enactment of this Act; or
(ii) subject to chapter 11 of title 11, United States Code,
if a plan of reorganization for such entity shall have been
confirmed by a duly entered order or judgment of a court that
is no longer subject to any appeal or judicial review, and
the substantial consummation, as such term is defined in
section 1101(2) of title 11, United States Code, of such plan
of reorganization has occurred.
(4) Indemnifiable cost.--The term ``indemnifiable cost''
means a cost, expense, debt, judgment, or settlement incurred
with respect to an asbestos claim that, at any time before
December 31, 2002, was or could have been subject to
indemnification, contribution, surety, or guaranty.
(5) Indemnitee.--The term ``indemnitee'' means a person
against whom any asbestos claim has been asserted before
December 31, 2002, who has received from any other person, or
on whose behalf a sum has been paid by such other person to
any third person, in settlement, judgment, defense, or
indemnity
[[Page S801]]
in connection with an alleged duty with respect to the
defense or indemnification of such person concerning that
asbestos claim, other than under a policy of insurance or
reinsurance.
(6) Indemnitor.--The term ``indemnitor'' means a person who
has paid under a written agreement at any time before
December 31, 2002, a sum in settlement, judgment, defense, or
indemnity to or on behalf of any person defending against an
asbestos claim, in connection with an alleged duty with
respect to the defense or indemnification of such person
concerning that asbestos claim, except that payments by an
insurer or reinsurer under a contract of insurance or
reinsurance shall not make the insurer or reinsurer an
indemnitor for purposes of this subtitle.
(7) Prior asbestos expenditures.--The term ``prior asbestos
expenditures''--
(A) means the gross total amount paid by or on behalf of a
person at any time before December 31, 2002, in settlement,
judgment, defense, or indemnity costs related to all asbestos
claims against that person;
(B) includes payments made by insurance carriers to or for
the benefit of such person or on such person's behalf with
respect to such asbestos claims, except as provided in
section 204(g);
(C) shall not include any payment made by a person in
connection with or as a result of changes in insurance
reserves required by contract or any activity or dispute
related to insurance coverage matters for asbestos-related
liabilities; and
(D) shall not include any payment made by or on behalf of
persons who are or were common carriers by railroad for
asbestos claims brought under the Act of April 22, 1908 (45
U.S.C. 51 et seq.), commonly known as the Employers'
Liability Act, as a result of operations as a common carrier
by railroad, including settlement, judgment, defense, or
indemnity costs associated with these claims.
(8) Trust.--The term ``trust'' means any trust, as
described in sections 524(g)(2)(B)(i) or 524(h) of title 11,
United States Code, or established in conjunction with an
order issued under section 105 of title 11, United States
Code, established or formed under the terms of a chapter 11
plan of reorganization, which in whole or in part provides
compensation for asbestos claims.
(9) Ultimate parent.--The term ``ultimate parent'' means a
person--
(A) that owned, as of December 31, 2002, the entire
beneficial interest, directly or indirectly, of at least 1
other person; and
(B) whose entire beneficial interest was not owned, on
December 31, 2002, directly or indirectly, 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 assigned to defendant participants.
(2) Aggregate payment obligations level.--The total
payments required of all defendant participants over the life
of the Fund shall not exceed a sum equal to $90,000,000,000
less any bankruptcy trust credits under section 222[(e)](d).
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 indirect 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
requirements of this Act, including a trust and channeling
injunction under section 524(g) of title 11, United States
Code. Any asbestos claim made in conjunction with a plan of
reorganization allowable under the preceding sentence shall
be subject to section 403(d) of this Act.
(b) Tier I.--Tier I shall include all debtors that,
together 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.--
(A) In general.--In this subsection, the term ``bankrupt
business entity'' means a person that is not a natural person
that--
(i) filed a petition for relief under chapter 11, of title
11, United States Code, before January 1, 2003;
(ii) has not substantially consummated, as such term is
defined under section 1101(2) of title 11, United States
Code, a plan of reorganization as of the date of enactment of
this Act; and
(iii) the bankruptcy court presiding over the business
entity's case determines, after notice and a hearing upon
motion filed by the entity within 30 days after the date of
enactment of this Act, that asbestos liability was not the
sole or precipitating cause of the entity's chapter 11
filing.
(B) Motion and related matters.--A motion under
subparagraph (A)(iii) shall be supported by--
(i) an affidavit or declaration of the chief executive
officer, chief financial officer, or chief legal officer of
the business entity; and
(ii) copies of the entity's public statements and
securities filings made in connection with the entity's
filing for chapter 11 protection.
Notice of such motion shall be as directed by the bankruptcy
court, and the hearing shall be limited 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 determination with respect to the motion within 60 days
after the date the motion is filed. In making its
determination, the bankruptcy court shall take into account
the affidavits, public statements, and securities filings,
and other information, if any, submitted by the entity and
all other facts and circumstances presented by an objecting
party. Any review of this determination shall be an expedited
appeal and limited to whether the decision was against the
weight of the evidence. Any appeal of a determination shall
be an expedited review to the United States Circuit Court of
Appeals for the circuit in which the bankruptcy is filed.
(2) Proceeding with reorganization plan.--A bankrupt
business entity may proceed with the filing, solicitation,
confirmation, and consummation of a plan of reorganization
that does not comply with the requirements of this Act,
including a trust and channeling injunction described in
section 524(g) of title 11, United States Code,
notwithstanding any other provisions of this Act, if the
bankruptcy court makes a favorable determination under
paragraph (1)(B), unless the bankruptcy court's determination
is overruled on appeal and all appeals are final. Such a
bankrupt business entity may continue to so proceed, 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 assure that all creditors and that entity
are treated fairly and equitably; and
[(ii) confirmation is clearly favored by the balance of the
equities; and]
such confirmation is required to avoid the liquidation or the
need for further financial reorganization of that entity; and
(B) an order confirming the plan of reorganization 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 determination required under paragraph (2), or if an
order confirming the plan is not entered 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, the
provisions of this Act shall apply to the bankrupt business
entity notwithstanding 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 extent 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 otherwise subject
to this Act as described under section 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 under 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 section 204
and subsection (b) of this section, 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, regardless 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 reorganization; 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 persons that are
the subject of a case under a chapter of title 11, United
States Code, after the date of enactment 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
[[Page S802]]
payable in accordance with the payment provisions under this
subtitle notwithstanding the pendency of the case under that
title 11;
(B) shall not be stayed or affected as to enforcement or
collection by any stay or injunction 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 undertaking 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 enactment of this
Act, whenever such debtor's case is either still pending, if
such case is pending under a chapter other than chapter 11 of
title 11, United States Code, or subject to confirmation or
substantial consummation of a plan of reorganization under
chapter 11 of title 11, United States Code.
(2) Prior agreements of no effect.--Notwithstanding section
403(c)(3), any plan of reorganization, agreement,
understanding, or undertaking by any debtor (including any
pre-petition agreement, understanding, or undertaking that
requires future performance) or any third party under
paragraph (1), and any agreement, understanding, or
undertaking entered into in anticipation, contemplation, or
furtherance of a plan of reorganization, to the extent it
relates to any asbestos claim, shall be of no force or
effect, and no person shall have any right or claim with
respect to any such agreement, understanding, or undertaking.
SEC. 203. SUBTIERS.
(a) In General.--
(1) Subtier liability.--Except as otherwise provided under
subsections (b), (d), and (l) of section 204, persons or
affiliated groups shall be included within Tiers I through
VII and shall pay amounts to the Fund in accordance with this
section.
(2) Revenues.--
(A) In general.--For purposes of this section, revenues
shall be determined in accordance with generally accepted
accounting principles, 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 affiliated group does
not file reports with the Securities and Exchange Commission,
revenues shall be the amount that the defendant participant
or affiliated group would have reported as revenues under the
rules of the Securities and Exchange 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 subsidiaries 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 person. If a debtor or affiliated group
includes a person in respect of whose liabilities for
asbestos claims a class action trust has been established,
there shall be excluded from the 2002 revenues of such debtor
or affiliated group--
(i) all revenues of the person in respect of whose
liabilities for asbestos claims the class action trust was
established; and
(ii) all revenues of the debtor and affiliated group
attributable to the historical business operations or assets
of such person, regardless of whether such business
operations or assets were owned or conducted during the year
2002 by such person or by any other person included within
such debtor and affiliated group.
(b) Tier I Subtiers.--
(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.--
(i) In general.--Each debtor included in Subtier 1 shall
pay on an annual basis 1.67024 percent of the debtor's 2002
revenues.
(ii) Exception to payment percentage.--Notwithstanding
clause (i), a debtor in Subtier 1 shall pay, on an annual
basis, $500,000 if--
(I) such debtor, including its direct or indirect majority-
owned subsidiaries, has less than $10,000,000 in prior
asbestos expenditures;
(II) at least 95 percent of such debtors revenues derive
from the provision of engineering and construction services;
and
(III) such debtor, including its direct or indirect
majority-owned subsidiaries, never manufactured, sold, or
distributed asbestos-containing products in the stream of
commerce.
(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 debtor's funding
obligation would render the debtor'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, 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 subsidiaries under
section 201(3)(A)(ii).
(ii) Cause of action.--Notwithstanding 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.
(iii) Right of contribution.--
(I) In general.--Notwithstanding any other provision of
this Act, if a direct or indirect majority-owned foreign
subsidiary of a debtor participant (with such relationship to
the debtor participant as determined on the date of enactment
of this Act) is or becomes subject to any foreign insolvency
proceedings, and such foreign direct or indirect-majority
owned subsidiary is liquidated in connection with such
foreign insolvency proceedings (or if the debtor
participant's interest in such foreign subsidiary is
otherwise canceled or terminated in connection with such
foreign insolvency proceedings), the debtor participant shall
have a claim against such foreign subsidiary or the estate of
such foreign subsidiary in an amount equal to the greater
of--
(aa) the estimated amount of all current and future
asbestos liabilities against such foreign subsidiary; or
(bb) the foreign subsidiary's allocable share of the debtor
participant's funding obligations to the Fund as determined
by such foreign subsidiary's allocable share of the debtor
participant's 2002 gross revenue.
(II) Determination of claim amount.--The claim amount under
subclause (I) (aa) or (bb) shall be determined by a court of
competent jurisdiction in the United States.
(III) Effect on payment obligation.--The right to, or
recovery under, any such claim shall not reduce, limit,
delay, or otherwise affect the debtor participant's payment
obligations under this Act.
(iv) Maximum annual payment obligation.--Subject to any
payments under sections 204(l) and 222[(d)](c), and
paragraphs (3), (4), and (5) of this subsection, the annual
payment obligation by a debtor under subparagraph (B) of this
paragraph shall not exceed $80,000,000.
(3) Subtier 2.--
(A) In general.--Notwithstanding paragraph (2), all persons
that are debtors that have no material continuing business
operations, other than class action trusts under paragraph
(6), but hold cash or other assets that have been allocated
or earmarked for the settlement of asbestos 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 unencumbered assets to the
Fund.
(4) Subtier 3.--
(A) In general.--Notwithstanding paragraph (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 assets.--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 assets.--Unencumbered
assets shall be calculated as the Subtier 3 person's total
assets, excluding insurance-related assets, less--
(i) all allowable administrative expenses;
(ii) allowable priority claims under section 507 of title
11, United States Code; and
(iii) allowable secured claims.]
(5) Calculation of unencumbered assets.--Unencumbered
assets shall be calculated as the Subtier 3 person's total
assets, excluding insurance-related assets, jointly held, in
trust or otherwise, with a defendant participant, less--
(A) all allowable administrative expenses;
(B) allowable priority claims under section 507 of title
11, United States Code; and
(C) allowable secured claims.
[(5)](6) Class action trust.--The assets of any class
action trust that has been established in respect of the
liabilities for asbestos claims of any person included within
a debtor and affiliated group that has been included in Tier
I (exclusive of any assets needed to pay previously incurred
expenses and asbestos claims 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] 60 days
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 affiliated group's revenues. Such subtiers
[[Page S803]]
shall each contain 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
(E) those persons or affiliated groups remaining 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 affiliated group's revenues. Such
subtiers shall each contain 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
(E) those persons or affiliated groups remaining 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 affiliated group's revenues. Such subtiers
shall each contain 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 highest revenues among those
remaining will be included in Subtier 2 and the rest in
Subtier 3.
(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 affiliated group's revenues. Such subtiers
shall each contain 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: $1,000,000.
(B) Subtier 2: $500,000.
(C) Subtier 3: $200,000.
(g) Tier VI Subtiers.--
(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 affiliated group's revenues. Such subtiers
shall each contain 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: $500,000.
(B) Subtier 2: $250,000.
(C) Subtier 3: $100,000.
(3) Other payment for certain persons and affiliated
groups.--
(A) In general.--Notwithstanding any other provision of
this subsection, and if an adjustment authorized by this
subsection does not impair the overall solvency of the Fund,
any person or affiliated group within Tier VI whose required
subtier payment in any given year would exceed such person's
or group's average annual expenditure on settlements, and
judgments of asbestos disease-related claims over the 8 years
before the date of enactment of this Act shall make the
payment required of the immediately lower subtier or, if the
person's or group's average annual expenditures on
settlements and judgments over the 8 years before the date of
enactment of this Act is less than $100,000, shall not be
required to make a payment under this Act.
(B) No further adjustment.--Any person or affiliated group
that receives an adjustment under this paragraph shall not be
eligible to receive any further adjustment under section
204(d).
(h) Tier VII.--
(1) In general.--Notwithstanding prior asbestos
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 Act of April 22, 1908 (45 U.S.C. 51 et
seq.), commonly known as the Employers' Liability Act, as 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 affiliated group) not less than
$5,000,000 in settlement, judgment, defense, or indemnity
costs relating to such claims.
(2) Additional amount.--The payment requirement for persons
or affiliated groups included in Tier VII shall be in
addition to any payment requirement 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 $6,000,000,000 or more is included in
Subtier 1 and shall make annual payments of $11,000,000 to
the Fund.
(4) Subtier 2.--Each person or affiliated group in Tier VII
with revenues of less than $6,000,000,000, but not less than
$4,000,000,000 is included in Subtier 2 and shall make annual
payments of $5,500,000 to the Fund.
(5) Subtier 3.--Each person or affiliated group in Tier VII
with revenues of less than $4,000,000,000, but not less than
$500,000,000 is included in Subtier 3 and shall make annual
payments of $550,000 to the Fund.
(6) Joint venture revenues and liability.--
(A) Revenues.--For purposes of this subsection, 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 subsection, the
liability under the Act of April 22, 1908 (45 U.S.C. 51 et
seq.), commonly known as the Employers' Liability Act, shall
be attributed to the parent owners of the joint venture on a
pro rata basis, reflecting their relative share of ownership.
The joint venture shall not be responsible for a payment
amount under this provision.
SEC. 204. ASSESSMENT ADMINISTRATION.
(a) In General.--Each defendant participant or affiliated
group shall pay to the Fund in the amounts provided under
this subtitle as appropriate for its tier and subtier each
year until the earlier to occur of the following:
(1) The participant or affiliated group has satisfied its
obligations under this subtitle during the 30 annual payment
cycles of the operation of the Fund.
(2) The amount received by the Fund from defendant
participants, excluding any amounts rebated to defendant
participants under [subsection (d)] subsections (d) and (m),
equals the maximum aggregate payment obligation of section
202(a)(2).
(b) Small Business Exemption.--Notwithstanding any other
provision of this subtitle, a person or affiliated group that
is a small business concern (as defined 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 prescribe
procedures on how amounts payable under this subtitle are to
be paid, including, to the extent the Administrator
determines appropriate, procedures relating to payment in
installments.
(d) Adjustments.--
(1) In general.--Under expedited procedures established by
the Administrator, a defendant participant may seek
adjustment of the amount of its payment 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 determination under this
subsection under the procedures prescribed in subsection
(i)(10). The Administrator may adjust a defendant
participant's payment obligations under this subsection,
either by forgiving the relevant 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 discretion of
the Administrator.
(2) Financial hardship adjustments.--
(A) In general.--A defendant participant may apply for an
adjustment based on financial hardship at any time during the
period in which a payment obligation to the Fund remains
outstanding and may qualify for such adjustment by
demonstrating that the amount of its payment obligation under
the statutory allocation would constitute a severe financial
hardship.
(B) Term.--Subject to the annual availability 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.
[[Page S804]]
(D) Reinstatement.--Following the expiration of the
hardship adjustment period provided for under this section
and during the funding period prescribed under subsection
(a), the Administrator shall annually determine whether there
has been a material change in the financial condition of the
defendant participant such that the Administrator may,
consistent with the policies and legislative intent
underlying this Act, reinstate under terms and conditions
established by the Administrator any part or all of the
defendant participant's payment obligation under the
statutory allocation that was not paid during the hardship
adjustment term.
(3) Inequity adjustments.--
(A) In general.--A defendant participant--
(i) may qualify for an adjustment based on inequity by
demonstrating that the amount of its payment obligation under
the statutory allocation is exceptionally inequitable--
(I) when measured against the amount of the likely cost to
the defendant participant net of insurance of its future
liability in the tort system in the absence of the Fund;
(II) when compared to the median payment rate for all
defendant participants in the same tier; or
(III) when measured against the percentage of the prior
asbestos expenditures of the defendant that were incurred
with respect to claims that neither resulted in an adverse
judgment against the defendant, nor were the subject of a
settlement that required a payment to a plaintiff by or on
behalf of that defendant;
(ii) shall qualify for a two-tier main tier and a two-tier
subtier adjustment reducing the defendant participant's
payment obligation based on inequity by demonstrating that
not less than 95 percent of such person's prior asbestos
expenditures arose from claims related to the manufacture and
sale of railroad locomotives and related products, so long as
such person's manufacture and sale of railroad locomotives
and related products is temporally and causally remote, and
for purposes of this clause, a person's manufacture and sale
of railroad locomotives and related products shall be deemed
to be temporally and causally remote if the asbestos claims
historically and generally filed against such person relate
to the manufacture and sale of railroad locomotives and
related products by an entity dissolved more than 25 years
before the date of enactment of this Act; and
(iii) shall be granted a two-tier adjustment reducing the
defendant participant's payment obligation based on inequity
by demonstrating that not less than 95 percent of such
participant's prior asbestos expenditures arose from asbestos
claims based on successor liability arising from a merger to
which the participant or its predecessor was a party that
occurred at least 30 years before the date of enactment of
this Act, and that such prior asbestos expenditures exceed
the inflation-adjusted value of the assets of the company
from which such liability was derived in such merger, and
upon such demonstration the Administrator shall grant such
adjustment for the life of the Fund and amounts paid by such
defendant participant prior to such adjustment in excess of
its adjusted payment obligation under this clause shall be
credited against next succeeding required payment
obligations.
(B) Payment rate.--For purposes of subparagraph (A), the
payment rate of a defendant 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 availability 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
remains justified.
(E) Reinstatement.--
(i) In general.--Following the termination of an inequity
adjustment under subparagraph (A), and during the funding
period prescribed under subsection (a), the Administrator
shall annually determine whether there has been a material
change in conditions which would support 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
defendant participant as if the inequity adjustment 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 defendant
participant to pay any part or all of amounts not paid due to
the inequity adjustment on such terms and conditions as
established by the Administrator.
(4) Limitation on adjustments.--The aggregate total of
financial hardship adjustments under paragraph (2) and
inequity adjustments under paragraph (3) in effect in any
given year shall not exceed $300,000,000, except to the
extent that--
(A) additional monies are available for such adjustments as
a result of carryover of prior years' funds under subsection
(j)(3) or as a result of monies being made available in that
year under subsection (k)(1)(A)[.]; or
(B) the Administrator determines that the $300,000,000 is
insufficient and additional adjustments as provided under
paragraph (5) are needed to address situations in which a
defendant participant would otherwise be rendered insolvent
by its payment obligations without such adjustment.
(5) Bankruptcy relief.--
(A) In general.--Any defendant participant may apply for an
adjustment under this paragraph at any time during the period
in which a payment obligation to the Fund remains outstanding
and may qualify for such adjustment by demonstrating, to a
reasonable degree of certainty, evidence that the amount of
its payment obligation would render the defendant participant
insolvent, as defined under section 101 of title 11, United
States Code, and unable to pay its debts as they become due.
(B) Information required.--Any defendant participant
seeking an adjustment or renewal of an adjustment under this
paragraph shall provide the Administrator with the
information required under section 521(1) of title 11 of the
United States Code.
(C) Limitation.--Any adjustment granted by the
Administrator under subparagraph (A) shall be limited to the
extent reasonably necessary to prevent insolvency of a
defendant participant.
(D) Term.--To the extent the Administrator grants any
relief under this paragraph, such adjustments shall have a
term of 1 year. An adjustment may be renewed or modified on
an annual basis upon the defendant participant demonstrating
that the adjustment or modification remains justified under
this paragraph.
(E) Reinstatement.--During the funding period prescribed
under subparagraph (A), the Administrator shall annually
determine whether there has been a material change in the
financial condition of any defendant participant granted an
adjustment under this paragraph such that the Administrator
may, consistent with the policies and legislative intent
underlying this Act, reinstate under terms and conditions
established by the Administrator any part or all of the
defendant participant's payment obligation under the
statutory allocation that was not paid during the adjustment
term.
[(5)](6) Advisory panels.--
(A) Appointment.--The Administrator shall appoint a
Financial Hardship Adjustment Panel and an Inequity
Adjustment Panel to advise the Administrator in carrying out
this subsection.
(B) Membership.--The membership of the panels appointed
under subparagraph (A) may overlap.
(C) Coordination.--The panels appointed under subparagraph
(A) shall coordinate 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
payment obligations of any other defendant participant.
(f) Consolidation of Payments.--
(1) In general.--For purposes of determining the payment
levels of defendant participants, any affiliated group
including 1 or more defendant participants may irrevocably
elect, as part of the submissions to be made under paragraphs
(1) and (3) of subsection (i), to report on a consolidated
basis all of the information necessary to determine the
payment level under this subtitle and pay to the Fund on a
consolidated basis.
(2) Election.--If an affiliated group elects consolidation
as provided in this subsection--
(A) for purposes of this Act other than this subsection,
the affiliated group shall be treated as if it were a single
participant, including with respect to the assessment of a
single annual payment under this subtitle for the entire
affiliated group;
(B) the ultimate parent of the affiliated group shall
prepare and submit each submission to be made under
subsection (i) on behalf of the entire affiliated group and
shall be solely liable, as between the Administrator and the
affiliated group only, for the payment of the annual amount
due from the affiliated group under this subtitle, except
that, if the ultimate parent does not pay when due any
payment obligation for the affiliated group, 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 affiliated group may be liable under
sections 223 and 224) from any member of the affiliated
group;
(C) all members of the affiliated group shall be identified
in the submission under subsection (i) and shall certify
compliance with this subsection and the Administrator's
regulations implementing this subsection; and
(D) the obligations under this subtitle shall not change
even if, after the date of enactment of this Act, the
beneficial ownership interest between any members of the
affiliated group shall change.
(3) Cause of action.--Notwithstanding section 221(e), this
Act shall not preclude actions among persons within an
affiliated group with respect to the payment obligations
under this Act.
(g) Determination of Prior Asbestos Expenditures.--
(1) In general.--For purposes of determining a defendant
participant's prior asbestos expenditures, the Administrator
shall prescribe such rules as may be necessary or appropriate
to assure that payments by indemnitors before December 31,
2002, shall be counted as part of the indemnitor's prior
asbestos expenditures, rather than the indemnitee's prior
asbestos expenditures, in accordance with this subsection.
[[Page S805]]
(2) Indemnifiable costs.--If an indemnitor has paid or
reimbursed to an indemnitee any indemnifiable cost or
otherwise made a payment on behalf of or for the benefit of
an indemnitee to a third party for an indemnifiable cost
before December 31, 2002, the amount of such indemnifiable
cost shall be solely for the account of the indemnitor for
purposes under this Act.
(3) Insurance payments.--When computing the prior asbestos
expenditures with respect to an asbestos claim, any amount
paid or reimbursed by insurance shall be solely for the
account of the indemnitor, even if the indemnitor would have
no direct right to the benefit of the insurance, if--
(A) such insurance has been paid or reimbursed to the
indemnitor or the indemnitee, or paid on behalf of or for the
benefit of the indemnitee; and
(B) the indemnitor has either, with respect to such
asbestos claim or any similar asbestos claim, paid or
reimbursed to its indemnitee any indemnifiable cost or paid
to any third party on behalf of or for the benefit of the
indemnitee any indemnifiable cost.
(4) Treatment of certain expenditures.--Notwithstanding any
other provision of this Act, where--
(A) an indemnitor entered into a stock purchase agreement
in 1988 that involved the sale of the stock of businesses
that produced friction and other products; and
(B) the stock purchase agreement provided that the
indemnitor indemnified the indemnitee and its affiliates for
losses arising from various matters, including asbestos
claims--
(i) asserted before the date of the agreement; and
(ii) filed after the date of the agreement and prior to the
10-year anniversary of the stock sale,
then the prior asbestos expenditures arising from the
asbestos claims described in clauses (i) and (ii) shall not
be for the account of either the indemnitor or indemnitee.
(h) Minimum Annual Payments.--
(1) In general.--The aggregate annual payments of defendant
participants to the Fund shall be at least $3,000,000,000 for
each calendar year in the first 30 years of the Fund, or
until such shorter time as the condition set forth in
subsection (a)(2) is attained.
(2) Guaranteed payment account.--To the extent payments in
accordance with sections 202 and 203 [(as modified by
subsections (b), (d), (f) and (g) of this section)] (as
modified by subsections (b), (d), (f), (g), and (m) of this
section) fail in any year to raise at least $3,000,000,000
[net of any adjustments under subsection (d)], after
applicable reductions or adjustments have been taken
according to subsections (d) and (m), the balance needed to
meet this required minimum aggregate annual payment shall be
obtained from the defendant guaranteed payment account
established under subsection (k).
(3) Guaranteed payment surcharge.--To the extent the
procedure set forth in paragraph (2) is insufficient to
satisfy the required minimum aggregate annual payment [net of
any adjustments under subsection (d)], after applicable
reductions or adjustments have been taken according to
subsections (d) and (m), the Administrator [may] shall unless
the Administrator implements a funding holiday under section
205(b), assess a guaranteed payment surcharge under
subsection (l).
(i) Procedures for Making Payments.--
(1) Initial year: tiers ii-vi.--
(A) In general.--Not later than [120] 90 days after
enactment of this Act, each defendant participant that is
included in Tiers II, III, IV, V, or VI shall file with the
Administrator--
(i) a statement of whether the defendant participant
irrevocably elects to report on a consolidated basis under
subsection (f);
(ii) a good-faith estimate of its prior asbestos
expenditures;
(iii) a statement of its 2002 revenues, determined in
accordance with section 203(a)(2); [and]
(iv) payment in the amount specified in section 203 for the
lowest subtier of the tier within which the defendant
participant falls, except that if the defendant participant,
or the affiliated group including the defendant participant,
had 2002 revenues exceeding $3,000,000,000, it or its
affiliated group shall pay the amount specified for Subtier 3
of Tiers II, III, or IV or Subtier 2 of Tiers V or VI,
depending on the applicable Tier[.]; and
(v) a signature page personally verifying the truth of the
statements and estimates described under this subparagraph,
as required under section 404 of the Sarbanes-Oxley Act of
2002 (15 U.S.C. 7201 et seq.).
(B) Relief.--
(i) In general.--The Administrator shall establish
procedures to grant a defendant participant relief from its
initial payment obligation if the participant shows that--
(I) the participant is likely to qualify for a financial
hardship adjustment; and
(II) failure to provide interim relief would cause severe
irreparable harm.
(ii) Judicial relief.--The Administrator's refusal to grant
relief under clause (i) is subject to immediate judicial
review under section 303.
(2) Initial year: tier i.--Not later than 60 days after
enactment of this Act, each debtor shall file with the
Administrator--
(A) a statement identifying the bankruptcy case(s)
associated with the debtor;
(B) a statement whether its prior asbestos expenditures
exceed $1,000,000;
(C) a statement whether it has material continuing business
operations and, if not, whether it holds cash or other assets
that have been allocated or earmarked for asbestos
settlements;
(D) in the case of debtors falling within Subtier 1 of Tier
I--
(i) a statement of the debtor's 2002 revenues, determined
in accordance with section 203(a)(2)[,] ;
(ii) for those debtors subject to the payment requirement
of section 203(b)(2)(B)(ii), a statement whether its prior
asbestos expenditures do not exceed $10,000,000, and a
description of its business operations sufficient to show the
requirements of that section are met; and
(iii) a payment under section 203(b)(2)(B);
(E) in the case of debtors falling within Subtier 2 of Tier
I, an assignment of its assets under section 203(b)(3)(B);
[and]
(F) in the case of debtors falling within Subtier 3 of Tier
I, a payment under section 203(b)(4)(B), and a statement of
how such payment was calculated[.]; and
(G) a signature page personally verifying the truth of the
statements and estimates described under this paragraph, as
required under section 404 of the Sarbanes-Oxley Act of 2002
(15 U.S.C. 7201 et seq.).
(3) Initial year: tier vii.--Not later than 90 days after
enactment of this Act, each defendant participant in Tier VII
shall file with the Administrator--
(A) a good-faith estimate of all payments of the type
described in section 203(h)(1) (as modified by section
203(h)(6));
(B) a statement of revenues calculated in accordance with
sections 203(a)(2) and 203(h); and
(C) payment in the amount specified in section 203(h).
(4) Notice to participants.--Not later than 240 days after
enactment of this Act, the Administrator shall--
(A) directly notify all reasonably identifiable defendant
participants of the requirement to submit information
necessary to calculate the amount of any required payment to
the Fund; and
(B) publish in the Federal Register a notice--
(i) setting forth the criteria in this Act, and as
prescribed by the Administrator in accordance with this Act,
for paying under this subtitle as a defendant participant and
requiring any person who may be a defendant participant to
submit such information; and
(ii) that includes a list of all defendant participants
notified by the Administrator under subparagraph (A), and
provides for 30 days for the submission by the public of
comments or information regarding the completeness and
accuracy of the list of identified defendant participants.
(5) Response required.--
(A) In general.--Any person who receives notice under
paragraph (4)(A), and any other person meeting the criteria
specified in the notice published under paragraph (4)(B),
shall provide the Administrator with an address to send any
notice from the Administrator in accordance with this Act and
all the information required by the Administrator in
accordance with this subsection no later than the earlier
of--
(i) 30 days after the receipt of direct notice; or
(ii) 30 days after the publication of notice in the Federal
Register.
(B) Certification.--The response submitted under
subparagraph (A) shall be signed by a responsible corporate
officer, general partner, proprietor, or individual of
similar authority, who shall certify under penalty of law the
completeness and accuracy of the information submitted.
(C) Consent to audit authority.--The response submitted
under subparagraph (A) shall include, on behalf of the
defendant participant or affiliated group, a consent to the
Administrator's audit authority under section 221(d).
(6) Notice of initial determination.--
(A) In general.--
(i) Notice to individual.--Not later than 60 days after
receiving a response under paragraph (5), the Administrator
shall send the person a notice of initial determination
identifying the tier and subtier, if any, into which the
person falls and the annual payment obligation, if any, to
the Fund, which determination shall be based on the
information received from the person under this subsection
and any other pertinent information available to the
Administrator and identified to the defendant participant.
(ii) Public notice.--Not later than 7 days after sending
the notification of initial determination to defendant
participants, the Administrator shall publish in the Federal
Register a notice listing the defendant participants that
have been sent such notification, and the initial
determination identifying the tier and subtier assignment and
annual payment obligation of each identified participant.
(B) No response; incomplete response.--If no response in
accordance with paragraph (5) is received from a defendant
participant, or if the response is incomplete, the initial
determination shall be based on the best information
available to the Administrator.
(C) Payments.--Within 30 days of receiving a notice of
initial determination requiring payment, the defendant
participant shall pay the Administrator the amount required
by the notice, after deducting any previous payment made by
the participant under this subsection. If the amount that the
defendant participant is required to pay is less than
[[Page S806]]
any previous payment made by the participant under this
subsection, the Administrator shall credit any excess payment
against the future payment obligations of that defendant
participant. The pendency of a petition for rehearing under
paragraph (10) shall not stay the obligation of the
participant to make the payment specified in the
Administrator's notice.
(7) Exemptions for information required.--
(A) Prior asbestos expenditures.--In lieu of submitting
information related to prior asbestos expenditures as may be
required for purposes of this subtitle, a non-debtor
defendant participant may consent to be assigned to Tier II.
(B) Revenues.--In lieu of submitting information related to
revenues as may be required for purposes of this subtitle, a
non-debtor defendant participant may consent to be assigned
to Subtier 1 of the defendant participant's applicable tier.
(8) New information.--
(A) Existing participant.--The Administrator shall adopt
procedures for requiring additional payment, or refunding
amounts already paid, based on new information received.
(B) Additional participant.--If the Administrator, at any
time, receives information that an additional person may
qualify as a defendant participant, the Administrator shall
require such person to submit information necessary to
determine whether that person is required to make payments,
and in what amount, under this subtitle and shall make any
determination or take any other act consistent with this Act
based on such information or any other information available
to the Administrator with respect to such person.
(9) Subpoenas.--The Administrator may request the Attorney
General to subpoena persons to compel testimony, records, and
other information relevant to its responsibilities under this
section. The Attorney General may enforce such subpoena in
appropriate proceedings in the United States district court
for the district in which the person to whom the subpoena was
addressed resides, was served, or transacts business.
(10) Rehearing.--A defendant participant has a right to
obtain rehearing of the Administrator's determination under
this subsection of the applicable tier or subtier [and], of
the Administrator's determination under subsection (d) of a
financial hardship or inequity adjustment, and of the
Administrator's determination under subsection (m) of a
distributor's adjustment, if the request for rehearing is
filed within 30 days after the defendant participant's
receipt of notice from the Administrator of the
determination. A defendant participant may not file an action
under section 303 unless the defendant participant requests a
rehearing under this paragraph. The Administrator shall
publish a notice in the Federal Register of any change in a
defendant participant's tier or subtier assignment or payment
obligation as a result of a rehearing.
(j) Defendant Hardship and Inequity Adjustment Account.--
(1) In general.--To the extent the total payments by
defendant participants in any given year exceed the minimum
aggregate annual payments required under subsection (h),
excess monies up to a maximum of $300,000,000 in any such
year shall be placed in a defendant hardship and inequity
adjustment account established within the Fund by the
Administrator.
(2) Use of account monies.--Monies from the defendant
hardship and inequity adjustment account shall be preserved
and administered like the remainder of the Fund, but shall be
reserved and may be used only--
(A) to make up for any relief granted to a defendant
participant for severe financial hardship or demonstrated
inequity under subsection (d) or to reimburse any defendant
participant granted such relief after its payment of the
amount otherwise due; and
(B) if the condition set forth in subsection (a)(2) is met,
for any purpose that the Fund may serve under this Act.
(3) Carryover of unused funds.--To the extent the
Administrator does not, in any given year, use all of the
funds allocated to the account under paragraph (1) for
adjustments granted under subsection (d), remaining funds in
the account shall be carried forward for use by the
Administrator for adjustments in subsequent years.
(k) Defendant Guaranteed Payment Account.--
(1) In general.--Subject to subsections (h) and (j), if
there are excess monies paid by defendant participants in any
given year, including any bankruptcy trust credits that may
be due under section 222[(e)](d), such monies--
(A) at the discretion of the Administrator, may be used to
provide additional adjustments under subsection (d), up to a
maximum aggregate of $50,000,000 in such year; and
(B) to the extent not used under subparagraph (A), shall be
placed in a defendant guaranteed payment account established
within the Fund by the Administrator.
(2) Use of account monies.--Monies from the defendant
guaranteed payment account shall be preserved and
administered like the remainder of the Fund, but shall be
reserved and may be used only--
(A) to ensure the minimum aggregate annual payment [set
forth in] required under subsection (h) [net of any
adjustments under subsection (d)], after applicable
reductions or adjustments have been taken according to
subsections (d) and (m) is reached each year; and
(B) if the condition set forth in subsection (a)(2) is met,
for any purpose that the Fund may serve under this Act.
(l) Guaranteed Payment Surcharge.--
(1) In general.--To the extent there are insufficient
monies in the defendant guaranteed payment account
established in subsection (k) to attain the minimum aggregate
annual payment required under subsection (h) [net of any
adjustments under subsection (d)] in any given year, the
Administrator [may] shall, unless the Administrator
implements a funding holiday under section 205(b), impose on
each defendant participant a surcharge as necessary to raise
the balance required to attain the minimum aggregate annual
payment required under subsection (h) [net of any adjustments
under subsection (d)] as provided in this subsection. Any
such surcharge shall be imposed on a pro rata basis, in
accordance with each defendant participant's relative annual
liability under sections 202 and 203 [(as modified by
subsections (b), (d), (f), and (g) of this section)] (as
modified by subsections (b), (d), (f), (g), and (m) of this
section).
(2) Limitation.--
(A) In general.--In no case shall the Administrator impose
a surcharge under this subsection on any defendant
participant included in Subtier 3 of Tiers V or VI as
described under section 203.
(B) Reallocation.--Any amount not imposed under
subparagraph (A) shall be reallocated on a pro-rata basis, in
accordance with each defendant participant's (other than a
defendant participant described under subparagraph (A))
relative annual liability under sections 202 and 203 (as
modified by subsections (b), (d), (f), and (g) of this
section).
[(2)](3) Certification.--
(A) In general.--Before imposing a guaranteed payment
surcharge under this subsection, the Administrator shall
certify that he or she has used all reasonable efforts to
collect mandatory payments for all defendant participants,
including by using the authority in subsection (i)(9) of this
section and section 223.
(B) Notice and comment.--Before making a final
certification under subparagraph (C), the Administrator shall
publish a notice in the Federal Register of a proposed
certification and provide in such notice for a public comment
period of 30 days.
(C) Final certification.--
(i) In general.--The Administrator shall publish a notice
of the final certification in the Federal Register after
consideration of all comments submitted under subparagraph
(B).
(ii) Written notice.--Not later than 30 days after
publishing any final certification under clause (i), the
Administrator shall provide each defendant participant with
written notice of that defendant participant's payment,
including the amount of any surcharge.
(m) Adjustments for Distributors.--
(1) Definition.--In this subsection, the term
``distributor'' means a person--
(A) whose prior asbestos expenditures arise exclusively
from the sale of products manufactured by others;
(B) who did not prior to December 31, 2002, sell raw
asbestos or a product containing more than 95 percent
asbestos by weight;
(C) whose prior asbestos expenditures did not arise out
of--
(i) the manufacture, installation, repair, reconditioning,
maintaining, servicing, constructing, or remanufacturing of
any product;
(ii) the control of the design, specification, or
manufacture of any product; or
(iii) the sale or resale of any product under, as part of,
or under the auspices of, its own brand, trademark, or
service mark; and
(D) who is not subject to assignment under section 202 to
Tier I, II, III or VII.
(2) Tier reassignment for distributors.--
(A) In general.--Notwithstanding section 202, the
Administrator shall assign a distributor to a Tier for
purposes of this title under the procedures set forth in this
paragraph.
(B) Designation.--After a final determination by the
Administrator under section 204(i), any person who is, or any
affiliated group in which every member is, a distributor may
apply to the Administrator for adjustment of its Tier
assignment under this subsection. Such application shall be
prepared in accordance with such procedures as the
Administrator shall promulgate by rule. Once the
Administrator designates a person or affiliated group as a
distributor under this subsection, such designation and the
adjustment of tier assignment under this subsection are
final.
(C) Payments.--Any person or affiliated group that seeks
adjustment of its Tier assignment under this subsection shall
pay all amounts required of it under this title until a final
determination by the Administrator is made under this
subsection. Such payments may not be stayed pending any
appeal. The Administrator shall grant any person or
affiliated group a refund or credit of any payments made if
such adjustment results in a lower payment obligation.
(D) Adjustment.--Subject to paragraph (3), any person or
affiliated group that the Administrator has designated as a
distributor under this subsection shall be given an
adjustment of Tier assignment as follows:
(i) A distributor that but for this subsection would be
assigned to Tier IV shall be deemed assigned to Tier V.
(ii) A distributor that but for this subsection would be
assigned to Tier V shall be deemed assigned to Tier VI.
[[Page S807]]
(iii) A distributor that but for this subsection would be
assigned to Tier VI shall be deemed assigned to no Tier and
shall have no obligation to make any payment to the Fund
under this Act.
(E) Exclusive to inequity adjustment.--Any person or
affiliated group designated by the Administrator as a
distributor under this subsection shall not be eligible for
an inequity adjustment under subsection 204(d).
(3) Limitation on adjustments.--The aggregate total of
distributor adjustments under this subsection in effect in
any given year shall not exceed $50,000,000. If the aggregate
total of distributors adjustments under this subsection would
otherwise exceed $50,000,000, then each distributor's
adjustment shall be reduced pro rata until the aggregate of
all adjustments equals $50,000,000.
(4) Rehearing.--A defendant participant has a right to
obtain a rehearing of the Administrator's determination on an
adjustment under this subsection under the procedures
prescribed in subsection (i)(10).
SEC. 205. STEPDOWNS AND FUNDING HOLIDAYS.
(a) Stepdowns.--
(1) In general.--Subject to paragraph (2), the minimum
aggregate annual funding obligation under section 204(h)
shall be reduced by 10 percent of the initial minimum
aggregate funding obligation at the end of the tenth,
fifteenth, twentieth, and twenty-fifth years after the date
of enactment of this Act. The reductions under this paragraph
shall be applied on an equal pro rata basis to the funding
obligations of all defendant participants, except with
respect to defendant participants in Tier 1, Subtiers 2 and
3, and class action trusts.
(2) Limitation.--The Administrator shall suspend, cancel,
reduce, or delay any reduction under paragraph (1) if at any
time the Administrator finds, in accordance with subsection
(c), that such action is necessary and appropriate to ensure
that the assets of the Fund and expected future payments
remain sufficient to satisfy the Fund's anticipated
obligations.
(b) Funding Holidays.--
(1) In general.--If the Administrator determines, at any
time after 10 years following the date of enactment of this
Act, that the assets of the Fund at the time of such
determination and expected future payments, taking into
consideration any reductions under subsection (a), are
sufficient to satisfy the Fund's anticipated obligations
without the need for all, or any portion of, that year's
payment otherwise required under this subtitle, the
Administrator shall reduce or waive all or any part of the
payments required from defendant participants for that year.
(2) Annual review.--The Administrator shall undertake the
review required by this subsection and make the necessary
determination under paragraph (1) every year.
(3) Limitations on funding holidays.--Any reduction or
waiver of the defendant participants' funding obligations
shall--
(A) be made only to the extent the Administrator determines
that the Fund will still be able to satisfy all of its
anticipated obligations; and
(B) be applied on an equal pro rata basis to the funding
obligations of all defendant participants, except with
respect to defendant participants in Subtiers 2 and 3 of Tier
I and class action trusts, for that year.
(4) New information.--If at any time the Administrator
determines that a reduction or waiver under this section may
cause the assets of the Fund and expected future payments to
decrease to a level at which the Fund may not be able to
satisfy all of its anticipated obligations, the Administrator
shall revoke all or any part of such reduction or waiver to
the extent necessary to ensure that the Fund's obligations
are met. Such revocations shall be applied on an equal pro
rata basis to the funding obligations of all defendant
participants, except defendant participants in Subtiers 2 and
3 of Tier I and class action trusts, for that year.
(c) Certification.--
(1) In general.--Before suspending, canceling, reducing, or
delaying any reduction under subsection (a) or granting or
revoking a reduction or waiver under subsection (b), the
Administrator shall certify that the requirements of this
section are satisfied.
(2) Notice and comment.--Before making a final
certification under this subsection, the Administrator shall
publish a notice in the Federal Register of a proposed
certification and a statement of the basis therefor and
provide in such notice for a public comment period of 30
days.
(3) Final certification.--
(A) In general.--The Administrator shall publish a notice
of the final certification in the Federal Register after
consideration of all comments submitted under paragraph (2).
(B) Written notice.--Not later than 30 days after
publishing any final certification under subparagraph (A),
the Administrator shall provide each defendant participant
with written notice of that defendant's funding obligation
for that year.
SEC. 206. ACCOUNTING TREATMENT.
Defendant participants payment obligations to the Fund
shall be subject to discounting under the applicable
accounting guidelines for generally accepted accounting
purposes and statutory accounting purposes for each defendant
participant. This section shall in no way reduce the amount
of monetary payments to the Fund by defendant participants as
required under section 202(a)(2).
Subtitle B--Asbestos Insurers Commission
SEC. 210. DEFINITION.
In this subtitle, the term ``captive insurance company''
means a company--
(1) whose entire beneficial interest is owned on the date
of enactment of this Act, directly or indirectly, by a
defendant participant or by the ultimate parent or the
affiliated group of a defendant participant;
(2) whose primary commercial business during the period
from calendar years 1940 through 1986 was to provide
insurance to its ultimate parent or affiliated group, or any
portion of the affiliated group or a combination thereof; and
(3) that was incorporated or operating no later than
December 31, 2003.
SEC. 211. ESTABLISHMENT OF ASBESTOS INSURERS COMMISSION.
(a) Establishment.--There is established the Asbestos
Insurers Commission (referred to in this subtitle as the
``Commission'') to carry out the duties described in section
212.
(b) Membership.--
(1) Appointment.--The Commission shall be composed of 5
members who shall be appointed by the President, by and with
the advice and consent of the Senate.
(2) Qualifications.--
(A) Expertise.--Members of the Commission shall have
sufficient expertise to fulfill their responsibilities under
this subtitle.
(B) Conflict of interest.--
(i) In general.--No member of the Commission appointed
under paragraph (1) may be an employee or immediate family
member of an employee of an insurer participant. No member of
the Commission shall be a shareholder of any insurer
participant. No member of the Commission shall be a former
officer or director, or a former employee or former
shareholder of any insurer participant who was such an
employee, shareholder, officer, or director at any time
during the 2-year period ending on the date of the
appointment, unless that is fully disclosed before
consideration in the Senate of the nomination for appointment
to the Commission.
(ii) Definition.--In clause (i), the term ``shareholder''
shall not include a broadly based mutual fund that includes
the stocks of insurer participants as a portion of its
overall holdings.
(C) Federal employment.--A member of the Commission may not
be an officer or employee of the Federal Government, except
by reason of membership on the Commission.
(3) Period of appointment.--Members shall be appointed for
the life of the Commission.
(4) Vacancies.--Any vacancy in the Commission shall be
filled in the same manner as the original appointment.
(5) Chairman.--The President shall select a Chairman from
among the members of the Commission.
(c) Meetings.--
(1) Initial meeting.--Not later than 30 days after the date
on which all members of the Commission have been appointed,
the Commission shall hold its first meeting.
(2) Subsequent meetings.--The Commission shall meet at the
call of the Chairman, as necessary to accomplish the duties
under section 212.
(3) Quorum.--No business may be conducted or hearings held
without the participation of a majority of the members of the
Commission.
SEC. 212. DUTIES OF ASBESTOS INSURERS COMMISSION.
(a) Determination of Insurer Payment Obligations.--
(1) In general.--
(A) Definitions.--For the purposes of this Act, the terms
``insurer'' and ``insurer participant'' shall, unless stated
otherwise, include direct insurers and reinsurers, as well as
any run-off entity established, in whole or in part, to
review and pay asbestos claims.
(B) Procedures for determining insurer payments.--The
Commission shall determine the amount that each insurer
participant shall be required to pay into the Fund under the
procedures described in this section. The Commission shall
make this determination by first promulgating a rule
establishing a methodology for allocation of payments among
insurer participants and then applying such methodology to
determine the individual payment for each insurer
participant. The methodology may include 1 or more allocation
formulas to be applied to all insurer participants or groups
of similarly situated participants. The Commission's rule
shall include a methodology for adjusting payments by insurer
participants [to make up, during any applicable payment year,
any amount by which aggregate insurer payments fall below the
level required in paragraph (3)(C).] to make up, during the
first 5 years of the life of the Fund and any subsequent
years as provided in section 405(e) for any reduction in an
insurer participant's annual allocated amount caused by the
granting of a financial hardship or exceptional circumstance
adjustment under this section, and any amount by which
aggregate insurer payments fall below the level required
under paragraph (3)(C) by reason of the failure or refusal of
any insurer participant to make a required payment, or for
any other reason that causes such payments to fall below the
level required under paragraph (3)(C). The Commission shall
conduct a thorough study (within the time limitations under
this subparagraph) of the accuracy of the reserve allocation
of each insurer participant, and may request information from
the Securities and Exchange Commission or any State
regulatory agency. Under this procedure, not later than 120
days after the initial meeting of the Commission, the
Commission shall commence a rulemaking proceeding under
[[Page S808]]
section 213(a) to propose and adopt a methodology for
allocating payments among insurer participants. In proposing
an allocation methodology, the Commission may consult with
such actuaries and other experts as it deems appropriate.
After hearings and public comment on the proposed allocation
methodology, the Commission shall as promptly as possible
promulgate a final rule establishing such methodology. After
promulgation of the final rule, the Commission shall
determine the individual payment of each insurer participant
under the procedures set forth in subsection (b).
(C) Scope.--Every insurer, reinsurer, and runoff entity
with asbestos-related obligations in the United States shall
be subject to the Commission's and Administrator's authority
under this Act, including allocation determinations, and
shall be required to fulfill its payment obligation without
regard as to whether it is licensed in the United States.
Every insurer participant not licensed or domiciled in the
United States shall, upon the first payment to the Fund,
submit a written consent to the Commission's and
Administrator's authority under this Act, and to the
jurisdiction of the courts of the United States for purposes
of enforcing this Act, in a form determined by the
Administrator. Any insurer participant refusing to provide a
written consent shall be subject to fines and penalties as
provided in section 223.
(D) Issuers of finite risk policies.--
(i) In general.--The issuer of any policy of retrospective
reinsurance purchased by an insurer participant or its
affiliate after 1990 that provides for a risk or loss
transfer to insure for [incurred] asbestos losses and other
losses (both known and unknown), including those policies
commonly referred to as ``finite risk'', ``aggregate stop
loss'', ``aggregate excess of loss'', or ``loss portfolio
transfer'' policies, shall be obligated to make payments
required under this Act directly to the Fund on behalf of the
insurer participant who is the beneficiary of such policy,
subject to the underlying retention and the limits of
liability applicable to such policy.
(ii) Payments.--Payments to the Fund required under this
Act shall be treated as loss payments for asbestos bodily
injury (as if such payments were incurred as liabilities
imposed in the tort system) and shall not be subject to
exclusion under policies described under clause (i) as a
liability with respect to tax or assessment. Within 90 days
after the scheduled date to make an annual payment to the
Fund, the insurer participant shall, at its discretion,
direct the reinsurer issuing such policy to pay all or a
portion of the annual payment directly to the Fund up to the
full applicable limits of liability under the policy. The
reinsurer issuing such policy shall be obligated to make such
payments directly to the Fund and shall be subject to the
enforcement provisions under section 223. The insurer
participant shall remain obligated to make payment to the
Fund of that portion of the annual payment not directed to
the issuer of such reinsurance policy.
(2) Amount of payments.--
(A) Aggregate payment obligation.--The total payment
required of all insurer participants over the life of the
Fund shall be equal to $46,025,000,000, less any bankruptcy
trust credits under section 222(d).
(B) Accounting standards.--In determining the payment
obligations of participants that are not licensed or
domiciled in the United States or that are runoff entities,
the Commission shall use accounting standards required for
United States licensed direct insurers.
(C) Captive insurance companies.--No payment to the Fund
shall be required from a captive insurance company, unless
and only to the extent a captive insurance company, on the
date of enactment of this Act, has liability, directly or
indirectly, for any asbestos claim of a person or persons
other than and unaffiliated with its ultimate parent or
affiliated group or pool in which the ultimate parent
participates or participated, or unaffiliated with a person
that was its ultimate parent or a member of its affiliated
group or pool at the time the relevant insurance or
reinsurance was issued by the captive insurance company.
(D) Several liability.--Unless otherwise provided under
this Act, each insurer participant's obligation to make
payments to the Fund is several. Unless otherwise provided
under this Act, there is no joint liability, and the future
insolvency by any insurer participant shall not affect the
payment required of any other insurer participant.
(3) Payment of criteria.--
(A) Inclusion in insurer participant category.--
(i) In general.--Insurers that have paid, or been assessed
by a legal judgment or settlement, at least $1,000,000 in
defense and indemnity costs before the date of enactment of
this Act in response to claims for compensation for asbestos
injuries arising from a policy of liability insurance or
contract of liability reinsurance or retrocessional
reinsurance shall be insurer participants in the Fund. Other
insurers shall be exempt from mandatory payments.
(ii) Inapplicability of section 202.--Since insurers may be
subject in certain jurisdictions to direct action suits, and
it is not the intent of this Act to impose upon an insurer,
due to its operation as an insurer, payment obligations to
the Fund in situations where the insurer is the subject of a
direct action, no insurer subject to mandatory payments under
this section [212] shall also be liable for payments to the
Fund as a defendant participant under section 202.
(B) Insurer participant allocation methodology.--
(i) In general.--The Commission shall establish the payment
obligations of individual insurer participants to reflect, on
an equitable basis, the relative tort system liability of the
participating insurers in the absence of this Act,
considering and weighting, as appropriate (but exclusive of
workers' compensation), such factors as--
(I) historic premium for lines of insurance associated with
asbestos exposure over relevant periods of time;
(II) recent loss experience for asbestos liability;
(III) amounts reserved for asbestos liability;
(IV) the likely cost to each insurer participant of its
future liabilities under applicable insurance policies; and
(V) any other factor the Commission may determine is
relevant and appropriate.
(ii) Determination of reserves.--The Commission may
establish procedures and standards for determination of the
asbestos reserves of insurer participants. The reserves of a
United States licensed reinsurer that is wholly owned by, or
under common control of, a United States licensed direct
insurer shall be included as part of the direct insurer's
reserves when the reinsurer's financial results are included
as part of the direct insurer's United States operations, as
reflected in footnote 33 of its filings with the National
Association of Insurance Commissioners or in published
financial statements prepared in accordance with generally
accepted accounting principles.
(C) Payment schedule.--The aggregate annual amount of
payments by insurer participants over the life of the Fund
shall be as follows:
(i) For years 1 and 2, $2,700,000,000 annually.
(ii) For years 3 through 5, $5,075,000,000 annually.
(iii) For years 6 through 27, $1,147,000,000 annually.
(iv) For year 28, $166,000,000.
(D) Certain runoff entities.--
[(i) In general.--Whenever the Commission requires payments
by a runoff entity that has assumed asbestos-related
liabilities from a Lloyd's syndicate or names that are
members of such a syndicate, the Commission shall not require
payments from such syndicates and names to the extent that
the runoff entity makes its required payments. In addition,
such syndicates and names shall be required to make payments
to the Fund in the amount of any adjustment granted to the
runoff entity for severe financial hardship or exceptional
circumstances.]
[(ii) Included runoff entities.--Subject to clause (i), a]
A runoff entity shall include any direct insurer or reinsurer
whose asbestos liability reserves have been transferred,
directly or indirectly, to the runoff entity and on whose
behalf the runoff entity handles or adjusts and, where
appropriate, pays asbestos claims.
(E) Financial hardship and exceptional circumstance
adjustments.--
(i) In general.--Under the procedures established in
subsection (b), an insurer participant may seek adjustment of
the amount of its payments based on exceptional circumstances
or severe financial hardship.
(ii) Financial adjustments.--An insurer participant may
qualify for an adjustment based on severe financial hardship
by demonstrating that payment of the amounts required by the
Commission's methodology would jeopardize the solvency of
such participant.
(iii) Exceptional circumstance adjustment.--An insurer
participant may qualify for an adjustment based on
exceptional circumstances by demonstrating--
(I) that the amount of its payments under the Commission's
allocation methodology is exceptionally inequitable when
measured against the amount of the likely cost to the
participant of its future liability in the tort system in the
absence of the Fund;
(II) an offset credit as described in subparagraphs (A) and
(C) of subsection (b)(4); or
(III) other exceptional circumstances.
The Commission may determine whether to grant an adjustment
and the size of any [such adjustment, but adjustments shall
not reduce the aggregate payment obligations] such
adjustment, but except as provided under paragraph (1)(B),
subsection (f)(3), and section 405(e), any such adjustment
shall not affect the aggregate payment obligations of insurer
participants specified in paragraph (2)(A) and subparagraph
(C) of this paragraph.
(iv) Time period of adjustment.--Except for adjustments for
offset credits, adjustments granted under this subsection
shall have a term not to exceed 3 years. An insurer
participant may renew its adjustment by demonstrating to the
Administrator that it remains justified.
(F) Funding holidays.--
(i) In general.--If the Administrator determines, at any
time after 10 years following the date of enactment of this
Act, that the assets of the Fund at the time of such
determination and expected future payments are sufficient to
satisfy the Fund's anticipated obligations without the need
for all, or any portion of, that year's payment otherwise
required under this subtitle, the Administrator shall reduce
or waive all or any part of the payments required from
insurer participants for that year.
(ii) Annual review.--The Administrator shall undertake the
review required by this subsection and make the necessary
determination under clause (i) every year.
[[Page S809]]
(iii) Limitations of funding holidays.--Any reduction or
waiver of the insurer participants' funding obligations
shall--
(I) be made only to the extent the Administrator determines
that the Fund will still be able to satisfy all of its
anticipated obligations; and
(II) be applied on an equal pro rata basis to the funding
obligations of all insurer participants for that year.
(iv) New information.--If at any time the Administrator
determines that a reduction or waiver under this section may
cause the assets of the Fund and expected future payments to
decrease to a level at which the Fund may not be able to
satisfy all of its anticipated obligations, the Administrator
shall revoke all or any part of such reduction or waiver to
the extent necessary to ensure that the Fund's obligations
are met. Such revocations shall be applied on an equal pro
rata basis to the funding obligations of all insurer
participants for that year.
(b) Procedure for Notifying Insurer Participants of
Individual Payment Obligations.--
(1) Notice to participants.--Not later than 30 days after
promulgation of the final rule establishing an allocation
methodology under subsection (a)(1), the Commission shall--
(A) directly notify all reasonably identifiable insurer
participants of the requirement to submit information
necessary to calculate the amount of any required payment to
the Fund under the allocation methodology; and
(B) publish in the Federal Register a notice--
(i) requiring any person who may be an insurer participant
(as determined by criteria outlined in the notice) to submit
such information; and
(ii) that includes a list of all insurer participants
notified by the Commission under subparagraph (A), and
provides for 30 days for the submission of comments or
information regarding the completeness and accuracy of the
list of identified insurer participants.
(2) Response required by individual insurer participants.--
(A) In general.--Any person who receives notice under
paragraph (1)(A), and any other person meeting the criteria
specified in the notice published under paragraph (1)(B),
shall respond by providing the Commission with all the
information requested in the notice under a schedule or by a
date established by the Commission.
(B) Certification.--The response submitted under
subparagraph (A) shall be signed by a responsible corporate
officer, general partner, proprietor, or individual of
similar authority, who shall certify under penalty of law the
completeness and accuracy of the information submitted.
(3) Notice to insurer participants of initial payment
determination.--
(A) In general.--
(i) Notice to insurers.--Not later than 120 days after
receipt of the information required by paragraph (2), the
Commission shall send each insurer participant a notice of
initial determination requiring payments to the Fund, which
shall be based on the information received from the
participant in response to the Commission's request for
information. An insurer participant's payments shall be
payable over the schedule established in subsection
(a)(3)(C), in annual amounts proportionate to the aggregate
annual amount of payments for all insurer participants for
the applicable year.
(ii) Public notice.--Not later than 7 days after sending
the notification of initial determination to insurer
participants, the Commission shall publish in the Federal
Register a notice listing the insurer participants that have
been sent such notification, and the initial determination on
the payment obligation of each identified participant.
(B) No response; incomplete response.--If no response is
received from an insurer participant, or if the response is
incomplete, the initial determination requiring a payment
from the insurer participant shall be based on the best
information available to the Commission.
(4) Commission review, revision, and finalization of
initial payment determinations.--
(A) Comments from insurer participants.--Not later than 30
days after receiving a notice of initial determination from
the Commission, an insurer participant may provide the
Commission with additional information to support adjustments
to the required payments to reflect severe financial hardship
or exceptional circumstances, including the provision of an
offset credit for an insurer participant for the amount of
any asbestos-related payments it made or was legally
obligated to make, including payments released from an
escrow, as the result of a bankruptcy judicially confirmed
after May 22, 2003, but before the date of enactment of this
Act.
(B) Additional participants.--If, before the final
determination of the Commission, the Commission receives
information that an additional person may qualify as an
insurer participant, the Commission shall require such person
to submit information necessary to determine whether payments
from that person should be required, in accordance with the
requirements of this subsection.
(C) Revision procedures.--The Commission shall adopt
procedures for revising initial payments based on information
received under subparagraphs (A) and (B), including a
provision requiring an offset credit for an insurer
participant for the amount of any asbestos-related payments
it made or was legally obligated to make, including payments
released from an escrow, as the result of a bankruptcy
confirmed after May 22, 2003, but before the date of
enactment of this Act.
(5) Examinations and subpoenas.--
(A) Examinations.--The Commission may conduct examinations
of the books and records of insurer participants to determine
the completeness and accuracy of information submitted, or
required to be submitted, to the Commission for purposes of
determining participant payments.
(B) Subpoenas.--The Commission may request the Attorney
General to subpoena persons to compel testimony, records, and
other information relevant to its responsibilities under this
section. The Attorney General may enforce such subpoena in
appropriate proceedings in the United States district court
for the district in which the person to whom the subpoena was
addressed resides, was served, or transacts business.
(6) Escrow payments.--Without regard to an insurer
participant's payment obligation under this section, any
escrow or similar account established before the date of
enactment of this Act by an insurer participant in connection
with an asbestos trust fund that has not been judicially
confirmed by final order by the date of enactment of this Act
shall be the property of the insurer participant and returned
to that insurer participant.
(7) Notice to insurer participants of final payment
determinations.--Not later than 60 days after the notice of
initial determination is sent to the insurer participants,
the Commission shall send each insurer participant a notice
of final determination.
(c) Insurer Participants Voluntary Allocation Agreement.--
(1) In general.--Not later than 30 days after the
Commission proposes its rule establishing an allocation
methodology under subsection (a)(1), direct insurer
participants licensed or domiciled in the United States,
other direct insurer participants, reinsurer participants
licensed or domiciled in the United States, or other
reinsurer participants, may submit an allocation agreement,
approved by all of the participants in the applicable group,
to the Commission.
(2) Allocation agreement.--To the extent the participants
in any such applicable group voluntarily agree upon an
allocation arrangement, any such allocation agreement shall
only govern the allocation of payments within that group and
shall not determine the aggregate amount due from that group.
(3) Certification.--The Commission shall determine whether
an allocation agreement submitted under subparagraph (A)
meets the requirements of this subtitle and, if so, shall
certify the agreement as establishing the allocation
methodology governing the individual payment obligations of
the participants who are parties to the agreement. The
authority of the Commission under this subtitle shall, with
respect to participants who are parties to a certified
allocation agreement, terminate on the day after the
Commission certifies such agreement. Under subsection (f),
the Administrator shall assume responsibility, if necessary,
for calculating the individual payment obligations of
participants who are parties to the certified agreement.
(d) Commission Report.--
(1) Recipients.--Until the work of the Commission has been
completed and the Commission terminated, the Commission shall
submit an annual report, containing the information described
under paragraph (2), to--
(A) the Committee on the Judiciary of the Senate;
(B) the Committee on the Judiciary of the House of
Representatives; and
(C) the Administrator.
(2) Contents.--The report under paragraph (1) shall state
the amount that each insurer participant is required to pay
to the Fund, including the payment schedule for such
payments.
[(e) Interim Payments.--
[(1) Authority of administrator.--During the period between
the date of enactment of this Act and the date when the
Commission issues its final determinations of payments, the
Administrator shall have the authority to require insurer
participants to make interim payments to the Fund to assure
adequate funding by insurer participants during such period.
[(2) Amount of interim payments.--During any applicable
year, the Administrator may require insurer participants to
make aggregate interim payments not to exceed the annual
aggregate amount specified in subsection (a)(3)(C).
[(3) Allocation of payments.--Interim payments shall be
allocated among individual insurer participants on an
equitable basis as determined by the Administrator. All
payments required under this subparagraph shall be credited
against the participant's ultimate payment obligation to the
Fund established by the Commission. If an interim payment
exceeds the ultimate payment, the Fund shall pay interest on
the amount of the overpayment at a rate determined by the
Administrator. If the ultimate payment exceeds the interim
payment, the participant shall pay interest on the amount of
the underpayment at the same rate. Any participant may seek
an exemption from or reduction in any payment required under
this subsection under the financial hardship and exceptional
circumstance standards established in subsection (a)(3)(D).
[[Page S810]]
[(4) Appeal of interim payment decisions.--A decision by
the Administrator to establish an interim payment obligation
shall be considered final agency action and reviewable under
section 303, except that the reviewing court may not stay an
interim payment during the pendency of the appeal.]
(e) Interim Payments.--
(1) Amount of interim payment.--Within 90 days after the
date of enactment of this Act, insurer participants shall
make an aggregate payment to the Fund not to exceed 50
percent of the aggregate funding obligation specified under
subsection (a)(3)(C) for year 1.
(2) Reserve information.--Within 30 days after the date of
enactment of this Act, each insurer participant shall submit
to the Administrator a certified statement of its net held
reserves for asbestos liabilities as of December 31, 2004.
(3) Allocation of interim payment.--The Administrator shall
allocate the interim payment among the individual insurer
participants on an equitable basis using the net held
asbestos reserve information provided by insurer participants
under subsection (a)(3)(B). Within 60 days after the date of
enactment of this Act, the Administrator shall publish in the
Federal Register the name of each insurer participant, and
the amount of the insurer participant's allocated share of
the interim payment. The use of net held asbestos reserves as
the basis to determine an interim allocation shall not be
binding on the Administrator in the determination of an
appropriate final allocation methodology under this section.
All payments required under this paragraph shall be credited
against the participant's ultimate payment obligation to the
Fund established by the Commission. If an interim payment
exceeds the ultimate payment, the Fund shall pay interest on
the amount of the overpayment at a rate determined by the
Administrator. If the ultimate payment exceeds the interim
payment, the participant shall pay interest on the amount of
the underpayment at the same rate. Any participant may seek
an exemption from or reduction in any payment required under
this subsection under the financial hardship and exceptional
circumstance standards established under subsection
(a)(3)(E).
(4) Appeal of interim payment decisions.--A decision by the
Administrator to establish an interim payment obligation
shall be considered final agency action and reviewable under
section 303, except that the reviewing court may not stay an
interim payment during the pendency of the appeal.
(f) Transfer of Authority From the Commission to the
Administrator.--
(1) In general.--Upon termination of the Commission under
section 215, the Administrator shall assume all the
responsibilities and authority of the Commission, except that
the Administrator shall not have the power to modify the
allocation methodology established by the Commission or by
certified agreement or to promulgate a rule establishing any
such methodology.
(2) Financial hardship and exceptional circumstance
adjustments.--Upon termination of the Commission under
section 215, the Administrator shall have the authority, upon
application by any insurer participant, to make adjustments
to annual payments upon the same grounds as provided in
subsection (a)(3)(D). Adjustments granted under this
subsection shall have a term not to exceed 3 years. An
insurer participant may renew its adjustment by demonstrating
that it remains justified. Upon the grant of any adjustment,
the Administrator shall increase the payments, consistent
with subsection (a)(1)(B), required of all other insurer
participants so that there is no reduction in the aggregate
payment required of all insurer participants for the
applicable years. The increase in an insurer participant's
required payment shall be in proportion to such participant's
share of the aggregate payment obligation of all insurer
participants.
(3) Credits for shortfall assessments.--If insurer
participants are required during the first 5 years of the
life of the Fund to make up any shortfall in required insurer
payments under subsection (a)(1)(B), then, beginning in year
6, the Administrator shall grant each insurer participant a
credit against its annual required payments during the
applicable years that in the aggregate equal the amount of
shortfall assessments paid by such insurer participant during
the first 5 years of the life of the Fund. The credit shall
be prorated over the same number of years as the number of
years during which the insurer participant paid a shortfall
assessment. Insurer participants which did not pay all
required payments to the Fund during the first 5 years of the
life of the Fund shall not be eligible for a credit. The
Administrator shall not grant a credit for shortfall
assessments imposed under section 405(e).
[(3)](4) Financial security requirements.--Whenever an
insurer participant's A.M. Best's claims payment rating or
Standard and Poor's financial strength rating falls below A-,
and until such time as either the insurer participant's A.M.
Best's Rating or Standard and Poor's rating is equal to or
greater than A-, the Administrator shall have the authority
to require that the participating insurer either--
(A) pay the present value of its remaining Fund payments at
a discount rate determined by the Administrator; or
(B) provide an evergreen letter of credit or financial
guarantee for future payments issued by an institution with
an A.M. Best's claims payment rating or Standard & Poor's
financial strength rating of at least A+.
(g) Accounting Treatment.--Insurer participants' payment
obligations to the Fund shall be subject to discounting under
the applicable accounting guidelines for generally accepted
accounting purposes and statutory accounting purposes for
each insurer participant. This subsection shall in no way
reduce the amount of monetary payments to the Fund by insurer
participants as required under subsection (a).
[(g)](h) Judicial Review.--The Commission's rule
establishing an allocation methodology, its final
determinations of payment obligations and other final action
shall be judicially reviewable as provided in title III.
SEC. 213. POWERS OF ASBESTOS INSURERS COMMISSION.
(a) Rulemaking.--The Commission shall promulgate such rules
and regulations as necessary to implement its authority under
this Act, including regulations governing an allocation
methodology. Such rules and regulations shall be promulgated
after providing interested parties with the opportunity for
notice and comment.
(b) Hearings.--The Commission may hold such hearings, sit
and act at such times and places, take such testimony, and
receive such evidence as the Commission considers advisable
to carry out this Act. The Commission shall also hold a
hearing on any proposed regulation establishing an allocation
methodology, before the Commission's adoption of a final
regulation.
(c) Information From Federal and State Agencies.--The
Commission may secure directly from any Federal or State
department or agency such information as the Commission
considers necessary to carry out this Act. Upon request of
the Chairman of the Commission, the head of such department
or agency shall furnish such information to the Commission.
(d) Postal Services.--The Commission may use the United
States mails in the same manner and under the same conditions
as other departments and agencies of the Federal Government.
(e) Gifts.--The Commission may not accept, use, or dispose
of gifts or donations of services or property.
(f) Expert Advice.--In carrying out its responsibilities,
the Commission may enter into such contracts and agreements
as the Commission determines necessary to obtain expert
advice and analysis.
SEC. 214. PERSONNEL MATTERS.
(a) Compensation of Members.--Each member of the Commission
shall be compensated at a rate equal to the daily equivalent
of the annual rate of basic pay prescribed for level IV of
the Executive Schedule under section 5315 of title 5, United
States Code, for each day (including travel time) during
which such member is engaged in the performance of the duties
of the Commission.
(b) Travel Expenses.--The members of the Commission shall
be allowed travel expenses, including per diem in lieu of
subsistence, at rates authorized for employees of agencies
under subchapter I of chapter 57 of title 5, United States
Code, while away from their homes or regular places of
business in the performance of services for the Commission.
(c) Staff.--
(1) In general.--The Chairman of the Commission may,
without regard to the civil service laws and regulations,
appoint and terminate an executive director and such other
additional personnel as may be necessary to enable the
Commission to perform its duties. The employment of an
executive director shall be subject to confirmation by the
Commission.
(2) Compensation.--The Chairman of the Commission may fix
the compensation of the executive director and other
personnel without regard to chapter 51 and subchapter III of
chapter 53 of title 5, United States Code, relating to
classification of positions and General Schedule pay rates,
except that the rate of pay for the executive director and
other personnel may not exceed the rate payable for level V
of the Executive Schedule under section 5316 of such title.
(d) Detail of Government Employees.--Any Federal Government
employee may be detailed to the Commission without
reimbursement, and such detail shall be without interruption
or loss of civil service status or privilege.
(e) Procurement of Temporary and Intermittent Services.--
The Chairman of the Commission may procure temporary and
intermittent services under section 3109(b) of title 5,
United States Code, at rates for individuals which do not
exceed the daily equivalent of the annual rate of basic pay
prescribed for level V of the Executive Schedule under
section 5316 of such title.
SEC. 215. TERMINATION OF ASBESTOS INSURERS COMMISSION.
The Commission shall terminate 90 days after the last date
on which the Commission makes a final determination of
contribution under section 212(b) or 90 days after the last
appeal of any final action by the Commission is exhausted,
whichever occurs later.
SEC. 216. EXPENSES AND COSTS OF COMMISSION.
All expenses of the Commission shall be paid from the Fund.
Subtitle C--Asbestos Injury Claims Resolution Fund
SEC. 221. ESTABLISHMENT OF ASBESTOS INJURY CLAIMS RESOLUTION
FUND.
(a) Establishment.--There is established in the Office of
Asbestos Disease Compensation the Asbestos Injury Claims
Resolution Fund, which shall be available to pay--
(1) claims for awards for an eligible disease or condition
determined under title I;
(2) claims for reimbursement for medical monitoring
determined under title I;
[[Page S811]]
(3) principal and interest on borrowings under subsection
(b);
(4) the remaining obligations to the asbestos trust of a
debtor and the class action trust under section 405(f)(8);
and
(5) administrative expenses to carry out the provisions of
this Act.
(b) Borrowing Authority.--
(1) In general.--The Administrator is authorized to borrow
from time to time amounts as set forth in this subsection,
for purposes of enhancing liquidity available to the Fund for
carrying out the obligations of the Fund under this Act. The
Administrator may authorize borrowing in such form, over such
term, with such necessary disclosure to its lenders as will
most efficiently enhance the Fund's liquidity.
(2) Federal financing bank.--In addition to the general
authority in paragraph (1), the Administrator may borrow from
the Federal Financing Bank in accordance with section 6 of
the Federal Financing Bank Act of 1973 (12 U.S.C. 2285), as
needed for performance of the Administrator's duties under
this Act for the first 5 years.
(3) Borrowing capacity.--The maximum amount that may be
borrowed under this subsection at any given time is the
amount that, taking into account all payment obligations
related to all previous amounts borrowed in accordance with
this subsection and all committed obligations of the Fund at
the time of borrowing, can be repaid in full (with interest)
in a timely fashion from--
(A) the available assets of the Fund as of the time of
borrowing; and
(B) all amounts expected to be paid by participants during
the subsequent 10 years.
[(4) Repayment obligations.--Repayment of monies borrowed
by the Administrator under this subsection is limited solely
to amounts available in the Asbestos Injury Claims Resolution
Fund established under this section.]
(4) Repayment obligations.--Repayment of monies borrowed by
the Administrator under this subsection shall be repaid in
full by the Fund contributors and is limited solely to
amounts available, present or future, in the Fund.
(c) Lockbox for Severe Asbestos-Related Injury Claimants.--
(1) In general.--Within the Fund, the Administrator shall
establish the following accounts:
(A) A Mesothelioma Account, which shall be used solely to
make payments to claimants eligible for an award under the
criteria of Level IX.
(B) A Lung Cancer Account, which shall be used solely to
make payments to claimants eligible for an award under the
criteria of Level VIII.
(C) A Severe Asbestosis Account, which shall be used solely
to make payments to claimants eligible for an award under the
criteria of Level V.
(D) A Moderate Asbestosis Account, which shall be used
solely to make payments to claimants eligible for an award
under the criteria of Level IV.
(2) Allocation.--The Administrator shall allocate to each
of the 4 accounts established under paragraph (1) a portion
of payments made to the Fund adequate to compensate all
anticipated claimants for each account. Within 60 days after
the date of enactment of this Act, and periodically during
the life of the Fund, the Administrator shall determine an
appropriate amount to allocate to each account after
consulting appropriate epidemiological and statistical
studies.
(d) Audit Authority.--
(1) In general.--For the purpose of ascertaining the
correctness of any information provided or payments made to
the Fund, or determining whether a person who has not made a
payment to the Fund was required to do so, or determining the
liability of any person for a payment to the Fund, or
collecting any such liability, or inquiring into any offense
connected with the administration or enforcement of this
title, the Administrator is authorized--
(A) to examine any books, papers, records, or other data
which may be relevant or material to such inquiry;
(B) to summon the person liable for a payment under this
title, or officer or employee of such person, or any person
having possession, custody, or care of books of account
containing entries relating to the business of the person
liable or any other person the Administrator may deem proper,
to appear before the Administrator at a time and place named
in the summons and to produce such books, papers, records, or
other data, and to give such testimony, under oath, as may be
relevant or material to such inquiry; and
(C) to take such testimony of the person concerned, under
oath, as may be relevant or material to such inquiry.
(2) False, fraudulent, or fictitious statements or
practices.--If the Administrator determines that materially
false, fraudulent, or fictitious statements or practices have
been submitted or engaged in by persons submitting
information to the Administrator or to the Asbestos Insurers
Commission or any other person who provides evidence in
support of such submissions for purposes of determining
payment obligations under this Act, the Administrator may
impose a civil penalty not to exceed $10,000 on any person
found to have submitted or engaged in a materially false,
fraudulent, or fictitious statement or practice under this
Act. The Administrator shall promulgate appropriate
regulations to implement this paragraph.
(e) Identity of Certain Defendant Participants;
Transparency.--
(1) Submission of information.--Not later than 60 days
after the date of enactment of this Act, any person who,
acting in good faith, has knowledge that such person or such
person's affiliated group has prior asbestos expenditures of
$1,000,000 or greater, shall submit to the Administrator--
(A) either the name of such person, or such person's
ultimate parent; and
(B) the likely tier to which such person or affiliated
group may be assigned under this Act.
(2) Publication.--Not later than 20 days after the end of
the 60-day period referred to in paragraph (1), the
Administrator or Interim Administrator, if the Administrator
is not yet appointed, shall publish in the Federal Register a
list of submissions required by this subsection, including
the name of such persons or ultimate parents and the likely
tier to which such persons or affiliated groups may be
assigned. After publication of such list, any person who,
acting in good faith, has knowledge that any other person has
prior asbestos expenditures of $1,000,000 or greater may
submit to the Administrator or Interim Administrator
information on the identity of that person and the person's
prior asbestos expenditures.
(f) No Private Right of Action.--Except as provided in
sections 203(b)(2)(D)(ii) and 204(f)(3), there shall be no
private right of action under any Federal or State law
against any participant based on a claim of compliance or
noncompliance with this Act or the involvement of any
participant in the enactment of this Act.
SEC. 222. MANAGEMENT OF THE FUND.
(a) In General.--Amounts in the Fund shall be held for the
exclusive purpose of providing benefits to asbestos claimants
and their beneficiaries[, including those provided in
subsection (c)] and to otherwise defray the reasonable
expenses of administering the Fund.
(b) Investments.--
(1) In general.--Amounts in the Fund shall be administered
and invested with the care, skill, prudence, and diligence,
under the circumstances prevailing at the time of such
investment, that a prudent person acting in a like capacity
and manner would use.
(2) Strategy.--The Administrator shall invest amounts in
the Fund in a manner that enables the Fund to make current
and future distributions to or for the benefit of asbestos
claimants. In pursuing an investment strategy under this
subparagraph, the Administrator shall consider, to the extent
relevant to an investment decision or action--
(A) the size of the Fund;
(B) the nature and estimated duration of the Fund;
(C) the liquidity and distribution requirements of the
Fund;
(D) general economic conditions at the time of the
investment;
(E) the possible effect of inflation or deflation on Fund
assets;
(F) the role that each investment or course of action plays
with respect to the overall assets of the Fund;
(G) the expected amount to be earned (including both income
and appreciation of capital) through investment of amounts in
the Fund; and
(H) the needs of asbestos claimants for current and future
distributions authorized under this Act.
[(c) Mesothelioma Research and Treatment Centers.--
[(1) In general.--The Administrator shall provide
$1,000,000 from the Fund for each of fiscal years 2005
through 2009 for each of up to 10 mesothelioma disease
research and treatment centers.
[(2) Requirements.--The Centers shall--
[(A) be chosen by the Director of the National Institutes
of Health;
[(B) be chosen through competitive peer review;
[(C) be geographically distributed throughout the United
States with special consideration given to areas of high
incidence of mesothelioma disease;
[(D) be closely associated with Department of Veterans
Affairs medical centers to provide research benefits and care
to veterans who have suffered excessively from mesothelioma;
[(E) be engaged in research to provide mechanisms for
detection and prevention of mesothelioma, particularly in the
areas of pain management and cures;
[(F) be engaged in public education about mesothelioma and
prevention, screening, and treatment;
[(G) be participants in the National Mesothelioma Registry;
and
[(H) be coordinated in their research and treatment efforts
with other Centers and institutions involved in exemplary
mesothelioma research.
(d)](c) Bankruptcy Trust Guarantee.--
(1) In general.--Notwithstanding any other provision of
this Act, the Administrator shall have the authority to
impose a pro rata surcharge on all participants under this
subsection to ensure the liquidity of the Fund, if--
(A) the declared assets from 1 or more bankruptcy trusts
established under a plan of reorganization confirmed and
substantially consummated on or before July 31, 2004, are not
available to the Fund because a final judgment that has been
entered by a court and is no longer subject to any appeal or
review has enjoined the transfer of assets required under
section 524(j)(2) of title 11,
[[Page S812]]
United States Code (as amended by section 402(f) of this
Act); and
(B) borrowing is insufficient to assure the Fund's ability
to meet its obligations under this Act such that the required
borrowed amount is likely to increase the risk of termination
of this Act under section 405 based on reasonable claims
projections.
(2) Allocation.--Any surcharge imposed under this
subsection shall be imposed over a period of 5 years on a pro
rata basis upon all participants, [in accordance with each
participant's relative annual liability under this subtitle
and subtitle B for those 5 years.] in accordance with the
relative aggregate funding obligations under sections
202(a)(2) and 212(a)(2)(A).
(3) Certification.--
(A) In general.--Before imposing a surcharge under this
subsection, the Administrator shall publish a notice in the
Federal Register and provide in such notice for a public
comment period of 30 days.
(B) Contents of notice.--The notice required under
subparagraph (A) shall include--
(i) information explaining the circumstances that make a
surcharge necessary and a certification that the requirements
under paragraph (1) are met;
(ii) the amount of the declared assets from any trust
established under a plan of reorganization confirmed and
substantially consummated on or before July 31, 2004, that
was not made, or is no longer, available to the Fund;
(iii) the total aggregate amount of the necessary
surcharge; and
(iv) the surcharge amount for each tier and subtier of
defendant participants and for each insurer participant.
(C) Final notice.--The Administrator shall publish a final
notice in the Federal Register and provide each participant
with written notice of that participant's schedule of
payments under this subsection. In no event shall any
required surcharge under this subsection be due before 60
days after the Administrator publishes the final notice in
the Federal Register and provides each participant with
written notice of its schedule of payments.
(4) Maximum amount.--In no event shall the total aggregate
surcharge imposed by the Administrator exceed the lesser of--
(A) the total aggregate amount of the declared assets of
the trusts established under a plan of reorganization
confirmed and substantially consummated prior to July 31,
2004, that are no longer available to the Fund; or
(B) $4,000,000,000.
(5) Declared assets.--
(A) In general.--In this subsection, the term ``declared
assets'' means--
(i) the amount of assets transferred by any trust
established under a plan of reorganization confirmed and
substantially consummated on or before July 31, 2004, to the
Fund that is required to be returned to that trust under the
final judgment described in paragraph (1)(A); or
(ii) if no assets were transferred by the trust to the
Fund, the amount of assets the Administrator determines would
have been available for transfer to the Fund from that trust
under section 402(f).
(B) Determination.--In making a determination under
subparagraph (A)(ii), the Administrator may rely on any
information reasonably available, and may request, and use
subpoena authority of the Administrator if necessary to
obtain, relevant information from any such trust or its
trustees.
[(e)](d) Bankruptcy Trust Credits.--
(1) In general.--Notwithstanding any other provision of
this Act, but subject to paragraph (2) of this subsection,
the Administrator shall provide a credit toward the aggregate
payment obligations under sections 202(a)(2) and 212(a)(2)(A)
for assets received by the Fund from any bankruptcy trust
established under a plan of reorganization confirmed and
substantially consummated after July 31, 2004.
(2) Allocation of credits.--The Administrator shall
allocate, for each such bankruptcy trust, the credits for
such assets between the defendant and insurer aggregate
payment obligations as follows:
(A) Defendant participants.--The aggregate amount that all
persons other than insurers contributing to the bankruptcy
trust would have been required to pay as Tier I defendants
under section 203(b) if the plan of reorganization under
which the bankruptcy trust was established had not been
confirmed and substantially consummated and the proceeding
under chapter 11 of title 11, United States Code, that
resulted in the establishment of the bankruptcy trust had
remained pending as of the date of enactment of this Act.
(B) Insurer participants.--The aggregate amount of all
credits to which insurers are entitled to under section
202(c)(4)(A) of the Act.
SEC. 223. ENFORCEMENT OF PAYMENT OBLIGATIONS.
(a) Default.--If any participant fails to make any payment
in the amount of and according to the schedule under this Act
or as prescribed by the Administrator, after demand and a 30-
day opportunity to cure the default, there shall be a lien in
favor of the United States for the amount of the delinquent
payment (including interest) upon all property and rights to
property, whether real or personal, belonging to such
participant.
(b) Bankruptcy.--In the case of a bankruptcy or insolvency
proceeding, the lien imposed under subsection (a) shall be
treated in the same manner as a lien for taxes due and owing
to the United States for purposes of the provisions of title
11, United States Code, or section 3713(a) of title 31,
United States Code. The United States Bankruptcy Court shall
have jurisdiction over any issue or controversy regarding
lien priority and lien perfection arising in a bankruptcy
case due to a lien imposed under subsection (a).
(c) Civil Action.--
(1) In general.--In any case in which there has been a
refusal or failure to pay any liability imposed under this
Act, the Administrator may bring a civil action in [the
United States District Court for the District of Columbia,]
any appropriate United States District Court, or any other
appropriate lawsuit or proceeding outside of the United
States--
(A) to enforce the liability and any lien of the United
States imposed under this section;
(B) to subject any property of the participant, including
any property in which the participant has any right, title,
or interest to the payment of such liability; or
(C) for temporary, preliminary, or permanent relief.
(2) Additional penalties.--In any action under paragraph
(1) in which the refusal or failure to pay was willful, the
Administrator may seek recovery--
(A) of punitive damages;
(B) of the costs of any civil action under this subsection,
including reasonable fees incurred for collection, expert
witnesses, and attorney's fees; and
(C) in addition to any other penalty, of a fine equal to
the total amount of the liability that has not been
collected.
(d) Enforcement Authority as to Insurer Participants.--
(1) In general.--In addition to or in lieu of the
enforcement remedies described in subsection (c), the
Administrator may seek to recover amounts in satisfaction of
a payment not timely paid by an insurer participant under the
procedures under this subsection.
(2) Subrogation.--To the extent required to establish
personal jurisdiction over nonpaying insurer participants,
the Administrator shall be deemed to be subrogated to the
contractual rights of participants to seek recovery from
nonpaying insuring participants that are domiciled outside
the United States under the policies of liability insurance
or contracts of liability reinsurance or retrocessional
reinsurance applicable to asbestos claims, and the
Administrator may bring an action or an arbitration against
the nonpaying insurer participants under the provisions of
such policies and contracts, provided that--
(A) any amounts collected under this subsection shall not
increase the amount of deemed erosion allocated to any policy
or contract under section 404, or otherwise reduce coverage
available to a participant; and
(B) subrogation under this subsection shall have no effect
on the validity of the insurance policies or reinsurance, and
any contrary State law is expressly preempted.
(3) Recoverability of contribution.--For purposes of this
subsection--
(A) all contributions to the Fund required of a participant
shall be deemed to be sums legally required to be paid for
bodily injury resulting from exposure to asbestos;
(B) all contributions to the Fund required of any
participant shall be deemed to be a single loss arising from
a single occurrence under each contract to which the
Administrator is subrogated; and
(C) with respect to reinsurance contracts, all
contributions to the Fund required of a participant shall be
deemed to be payments to a single claimant for a single loss.
(4) No credit or offset.--In any action brought under this
subsection, the nonpaying insurer or reinsurer shall be
entitled to no credit or offset for amounts collectible or
potentially collectible from any participant nor shall such
defaulting participant have any right to collect any sums
payable under this section from any participant.
(5) Cooperation.--Insureds and cedents shall cooperate with
the Administrator's reasonable requests for assistance in any
such proceeding. The positions taken or statements made by
the Administrator in any such proceeding shall not be binding
on or attributed to the insureds or cedents in any other
proceeding. The outcome of such a proceeding shall not have a
preclusive effect on the insureds or cedents in any other
proceeding and shall not be admissible against any subrogee
under this section. The Administrator shall have the
authority to settle or compromise any claims against a
nonpaying insurer participant under this subsection.
(e) Bar on United States Business.--If any direct insurer
or reinsurer refuses to [furnish any information requested by
or to pay any contribution required by this Act, then, in
addition to any other penalties imposed by this Act, the
Administrator [may] shall issue an order barring such entity
and its affiliates from insuring risks located within the
United States or otherwise doing business within the United
States unless and until it complies. If any direct insurer or
reinsurer refuses to furnish any information requested by the
Administrator, the Administrator may issue an order barring
such entity and its affiliates from insuring risks located
within the United States or otherwise doing business within
the United States unless and until it complies. Insurer
participants or their affiliates seeking to obtain a license
from any State to write any type of insurance shall be barred
[[Page S813]]
from obtaining any such license until payment of all
contributions required as of the date of license application.
(f) Credit for Reinsurance.--If the Administrator
determines that an insurer participant that is a reinsurer is
in default in paying any required contribution or otherwise
not in compliance with this Act, the Administrator may issue
an order barring any direct insurer participant from
receiving credit for reinsurance purchased from the
defaulting reinsurer after the date of the Administrator's
determination of default. Any State law governing credit for
reinsurance to the contrary is preempted.
(g) Defense Limitation.--In any proceeding under this
section, the participant shall be barred from bringing any
challenge to any determination of the Administrator or the
Asbestos Insurers Commission regarding its liability under
this Act, or to the constitutionality of this Act or any
provision thereof, if such challenge could have been made
during the review provided under section 204(i)(10), or in a
judicial review proceeding under section 303.
(h) Deposit of Funds.--
(1) In general.--Any funds collected under subsection
(c)(2) (A) or (C) shall be--
(A) deposited in the Fund; and
(B) used only to pay--
(i) claims for awards for an eligible disease or condition
determined under title I; or
(ii) claims for reimbursement for medical monitoring
determined under title I.
(2) No effect on other liabilities.--The imposition of a
fine under subsection (c)(2)(C) shall have no effect on--
(A) the assessment of contributions under subtitles A and
B; or
(B) any other provision of this Act.
(i) Property of the Estate.--Section 541(b) of title 11,
United States Code, is amended--
(1) in paragraph (4)(B)(ii), by striking ``or'' at the end;
(2) in paragraph (5), by striking ``prohibition.'' and
inserting ``prohibition; or''; and
(3) by inserting after paragraph (5) and before the last
undesignated sentence the following:
``(6) the value of any pending claim against or the amount
of an award granted from the Asbestos Injury Claims
Resolution Fund established under the Fairness in Asbestos
Injury Resolution Act of 2005.''.
(j) Proposed Transactions.--
(1) Notice of proposed transaction.--Any participant that
has taken any action to effectuate a proposed transaction or
a proposed series of transactions under which a significant
portion of such participant's assets, properties or business
will, if consummated as proposed, be, directly or indirectly,
transferred by any means (including, without limitation, by
sale, dividend, contribution to a subsidiary or split-off) to
1 or more persons other than the participant shall provide
written notice to the Administrator of such proposed
transaction (or proposed series of transactions). Upon the
request of such participant, and for so long as the
participant shall not publicly disclose the transaction or
series of transactions and the Administrator shall not
commence any action under paragraph (6), the Administrator
shall treat any such notice as confidential commercial
information under section 552 of title 5, United States Code.
(2) Timing of notice and related actions.--
(A) In general.--Any notice that a participant is required
to give under paragraph (1) shall be given not later than 30
days before the date of consummation of the proposed
transaction or the first transaction to occur in a proposed
series of transactions.
(B) Other notifications.--
(i) In general.--Not later than the date in any year by
which a participant is required to make its contribution to
the Fund, the participant shall deliver to the Administrator
a written certification stating that--
(I) the participant has complied during the period since
the last such certification or the date of enactment of this
Act with the notice requirements set forth in this
subsection; or
(II) the participant was not required to provide any notice
under this subsection during such period.
(ii) Summary.--The Administrator shall include in the
annual report required to be submitted to Congress under
section 405 a summary of all such notices (after removing all
confidential identifying information) received during the
most recent fiscal year.
(C) Notice completion.--The Administrator shall not
consider any notice given under paragraph (1) as given until
such time as the Administrator receives substantially all the
information required by this subsection.
(3) Contents of notice.--
(A) In general.--The Administrator shall determine by rule
or regulation the information to be included in the notice
required under this subsection, which shall include such
information as may be necessary to enable the Administrator
to determine whether--
(i) the person or persons to whom the assets, properties or
business are being transferred in the proposed transaction
(or proposed series of transactions) should be considered to
be the successor in interest of the participant for purposes
of this Act, or
(ii) the proposed transaction (or proposed series of
transactions) would, if consummated, be subject to avoidance
by a trustee under section 544(b) or 548 of title 11, United
States Code, as if, but whether or not, the participant is
subject to a case under title 11, United States Code.
(B) Statements.--The notice shall also include--
(i) a statement by the participant as to whether it
believes any person will or has become a successor in
interest to the participant for purposes of this Act and, if
so, the identity of that person; and
(ii) a statement by the participant as to whether that
person has acknowledged that it will or has become a
successor in interest for purposes of this Act.
(4) Definition.--In this subsection, the term ``significant
portion of the assets, properties or business of a
participant'' means assets (including, without limitation,
tangible or intangible assets, securities and cash),
properties or business of such participant (or its affiliated
group, to the extent that the participant has elected to be
part of an affiliated group under section 204(f)) that,
together with any other asset, property or business
transferred by such participant in any of the previous
completed 5 fiscal years of such participant (or, as
appropriate, its affiliated group), and as determined in
accordance with United States generally accepted accounting
principles as in effect from time to time--
(A) generated at least 40 percent of the revenues of such
participant (or its affiliated group);
(B) constituted at least 40 percent of the assets of such
participant (or its affiliated group);
(C) generated at least 40 percent of the operating cash
flows of such participant (or its affiliated group); or
(D) generated at least 40 percent of the net income or loss
of such participant (or its affiliated group),
as measured during any of such 5 previous fiscal years.
(5) Consummation of transaction.--Any proposed transaction
(or proposed series of transactions) with respect to which a
participant is required to provide notice under paragraph (1)
may not be consummated until at least 30 days after delivery
to the Administrator of such notice, unless the Administrator
shall earlier terminate the notice period. The Administrator
shall endeavor whenever possible to terminate a notice period
at the earliest practicable time.
(6) Right of action.--
(A) In general.--Notwithstanding section 221(f), if the
Administrator or any participant believes that a participant
proposes to engage or has engaged, directly or indirectly,
in, or is the subject of, a transaction (or series of
transactions)--
(i) involving a person or persons who, as a result of such
transaction (or series of transactions), may have or may
become the successor in interest or successors in interest of
such participant, where the status or potential status as a
successor in interest has not been stated and acknowledged by
the participant and such person; or
(ii) that may be subject to avoidance by a trustee under
section 544(b) or 548 of title 11, United States Code, as if,
but whether or not, the participant is a subject to a case
under title 11, United States Code,
then the Administrator or such participant may, as a deemed
creditor under applicable law, bring a civil action in an
appropriate forum against the participant or any other person
who is either a party to the transaction (or series of
transactions) or the recipient of any asset, property or
business of the participant.
(B) Relief allowed.--In any action commenced under this
subsection, the Administrator or a participant, as
applicable, may seek--
(i) with respect to a transaction (or series of
transactions) referenced in clause (i) of subparagraph (A), a
declaratory judgment regarding whether such person will or
has become the successor in interest of such participant; or
(ii) with respect to a transaction (or series of
transactions) referenced in clause (ii) of subparagraph (A)--
(I) a temporary restraining order or a preliminary or
permanent injunction against such transaction (or series of
transactions); or
(II) such other relief regarding such transaction (or
series of transactions) as the court determines to be
necessary to ensure that performance of a participant's
payment obligations under this Act is not materially impaired
by reason of such transaction (or series of transactions).
(C) Applicability.--If the Administrator or a participant
wishes to challenge a statement made by a participant that a
person will not or has not become a successor in interest for
purposes of this Act, then this paragraph shall be the
exclusive means by which the determination of whether such
person will or has become a successor in interest of the
participant shall be made. This paragraph shall not preempt
any other rights of any person under applicable Federal or
State law.
(D) Venue.--Any action under this paragraph shall be
brought in any appropriate United States district court or,
to the extent necessary to obtain complete relief, any other
appropriate forum outside of the United States.
(7) Rules and regulations.--The Administrator may
promulgate regulations to effectuate the intent of this
subsection, including regulations relating to the form,
timing and content of notices.
SEC. 224. INTEREST ON UNDERPAYMENT OR NONPAYMENT.
If any amount of payment obligation under this title is not
paid on or before the last date prescribed for payment, the
liable party shall pay interest on such amount at the Federal
short-term rate determined under section 6621(b) of the
Internal Revenue Code of 1986, plus 5 percentage points, for
the period from such last date to the date paid.
SEC. 225. EDUCATION, CONSULTATION, SCREENING, AND MONITORING.
(a) In General.--The Administrator shall establish a
program for the education, consultation, medical screening,
and medical monitoring of persons with exposure to asbestos.
The program shall be funded by the Fund.
[[Page S814]]
(b) Outreach and Education.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Administrator shall establish an
outreach and education program, including a website designed
to provide information about asbestos-related medical
conditions to members of populations at risk of developing
such conditions.
(2) Information.--The information provided under paragraph
(1) shall include information about--
(A) the signs and symptoms of asbestos-related medical
conditions;
(B) the value of appropriate medical screening programs;
and
(C) actions that the individuals can take to reduce their
future health risks related to asbestos exposure.
(3) Contracts.--Preference in any contract under this
subsection shall be given to providers that are existing
nonprofit organizations with a history and experience of
providing occupational health outreach and educational
programs for individuals exposed to asbestos.
(c) Medical Screening Program.--
(1) Establishment of program.--Not sooner than 18 months or
later than 24 months after the Administrator certifies that
the Fund is fully operational and processing claims at a
reasonable rate, the Administrator shall adopt guidelines
establishing a medical screening program for individuals at
high risk of asbestos-related disease resulting from an
asbestos-related disease. In promulgating such guidelines,
the Administrator shall consider the views of the Advisory
Committee on Asbestos Disease Compensation, the Medical
Advisory Committee, and the public.
(2) Eligibility criteria.--
(A) In general.--The guidelines promulgated under this
subsection shall establish criteria for participation in the
medical screening program.
(B) Considerations.--In promulgating eligibility criteria
the Administrator shall take into consideration all factors
relevant to the individual's effective cumulative exposure to
asbestos, including--
(i) any industry in which the individual worked;
(ii) the individual's occupation and work setting;
(iii) the historical period in which exposure took place;
(iv) the duration of the exposure;
(v) the intensity and duration of non-occupational
exposures; [and]
(vi) the intensity and duration of exposure to risk levels
of naturally occurring asbestos as defined by the
Environmental Protection Agency; and
[(vi)](vii) any other factors that the Administrator
determines relevant.
(3) Protocols.--The guidelines developed under this
subsection shall establish protocols for medical screening,
which shall include--
(A) administration of a health evaluation and work history
questionnaire;
(B) an evaluation of smoking history;
(C) a physical examination by a qualified physician with a
doctor-patient relationship with the individual;
(D) a chest x-ray read by a certified B-reader as defined
under section 121(a)(4); and
(E) pulmonary function testing as defined under section
121(a)(13).
(4) Frequency.--The Administrator shall establish the
frequency with which medical screening shall be provided or
be made available to eligible individuals, which shall be not
less than every 5 years.
(5) Provision of services.--The Administrator shall provide
medical screening to eligible individuals directly or by
contract with another agency of the Federal Government, with
State or local governments, or with private providers of
medical services. The Administrator shall establish strict
qualifications for the providers of such services, and shall
periodically audit the providers of services under this
subsection, to ensure their integrity, high degree of
competence, and compliance with all applicable technical and
professional standards. No provider of medical screening
services may have earned more than 15 percent of their income
from the provision of services of any kind in connection with
asbestos litigation in any of the 3 years preceding the date
of enactment of this Act. All contracts with providers of
medical screening services under this subsection shall
contain provisions [allowing the Administrator to terminate]
for reimbursement of screening services at a reasonable rate
and termination of such contracts for cause if the
Administrator determines that the service provider fails to
meet the qualifications established under this subsection.
(6) Limitation of compensation for services.--The
compensation required to be paid to a provider of medical
screening services for such services furnished to an eligible
individual shall be limited to the amount that would be
reimbursed at the time of the furnishing of such services
under title XVIII of the Social Security Act (42 U.S.C. 1395
et seq.) for similar services if[--
[(A) the individual were entitled to benefits under part A
of such title and enrolled under part B of such title; and
(B)] such services are covered under title XVIII of the
Social Security Act (42 U.S.C. 1395 et seq.).
(7) Funding; periodic review.--
(A) Funding.--The Administrator shall make such funds
available from the Fund to implement this section, with a
minimum of $20,000,000 but not more than $30,000,000 each
year in each of the 5 years following the effective date of
the medical screening program. Notwithstanding the preceding
sentence, the Administrator shall suspend the operation of
the program or reduce its funding level if necessary to
preserve the solvency of the Fund and to prevent the sunset
of the overall program under section 405(f).
(B) Review.--The Administrator may reduce the amount of
funding below $20,000,000 each year if the program is fully
implemented. The Administrator's first annual report under
section 405 following the close of the 4th year of operation
of the medical screening program shall include an analysis of
the usage of the program, its cost and effectiveness, its
medical value, and the need to continue that program for an
additional 5-year period. The Administrator shall also
recommend to Congress any improvements that may be required
to make the program more effective, efficient, and
economical, and shall recommend a funding level for the
program for the 5 years following the period of initial
funding referred to under subparagraph (A).
(d) Limitation.--In no event shall the total amount
allocated to the medical screening program established under
this subsection over the lifetime of the Fund exceed
$600,000,000.
(e) Medical Monitoring Program and Protocols.--
(1) In general.--The Administrator shall establish
procedures for a medical monitoring program for persons
exposed to asbestos who have been approved for level I
compensation under section 131.
(2) Procedures.--The procedures for medical monitoring
shall include--
(A) specific medical tests to be provided to eligible
individuals and the periodicity of those tests, which shall
initially be provided every 3 years and include--
(i) administration of a health evaluation and work history
questionnaire;
(ii) physical examinations, including blood pressure
measurement, chest examination, and examination for clubbing;
(iii) AP and lateral chest x-ray; and
(iv) spirometry performed according to ATS standards;
(B) qualifications of medical providers who are to provide
the tests required under subparagraph (A); and
(C) administrative provisions for reimbursement from the
Fund of the costs of monitoring eligible claimants, including
the costs associated with the visits of the claimants to
physicians in connection with medical monitoring, and with
the costs of performing and analyzing the tests.
(3) Preferences.--
(A) In general.--In administering the monitoring program
under this subsection, preference shall be given to medical
and program providers with--
(i) a demonstrated capacity for identifying, contacting,
and evaluating populations of workers or others previously
exposed to asbestos; and
(ii) experience in establishing networks of medical
providers to conduct medical screening and medical monitoring
examinations.
(B) Provision of lists.--Claimants that are eligible to
participate in the medical monitoring program shall be
provided with a list of approved providers in their
geographic area at the time such claimants become eligible to
receive medical monitoring.
(f) Contracts.--The Administrator may enter into contracts
with qualified program providers that would permit the
program providers to undertake large-scale medical screening
and medical monitoring programs by means of subcontracts with
a network of medical providers, or other health providers.
(g) Review.--Not later than 5 years after the date of
enactment of this Act, and every 5 years thereafter, the
Administrator shall review, and if necessary update, the
protocols and procedures established under this section.
SEC. 226. NATIONAL MESOTHELIOMA RESEARCH AND TREATMENT
PROGRAM.
(a) In General.--There is established the National
Mesothelioma Research and Treatment Program (referred to in
this section as the ``Program'') to investigate and advance
the detection, prevention, treatment, and cure of malignant
mesothelioma.
(b) Mesothelioma Centers.--
(1) In general.--The Administrator shall make available
$1,500,000 from the Fund, and the Director of the National
Institutes of Health shall make available $1,000,000 from
amounts available to the Director, for each of fiscal years
2006 through 2015, for the establishment of each of 10
mesothelioma disease research and treatment centers.
(2) Requirements.--The Director of the National Institutes
of Health, in consultation with the Medical Advisory
Committee, shall conduct a competitive peer review process to
select sites for the centers described in paragraph (1). The
Director shall ensure that sites selected under this
paragraph are--
(A) geographically distributed throughout the United States
with special consideration given to areas of high incidence
of mesothelioma disease;
(B) closely associated with Department of Veterans Affairs
medical centers, in order to provide research benefits and
care to veterans who have suffered excessively from
mesothelioma;
(C) engaged in exemplary laboratory and clinical
mesothelioma research, including clinical trials, to provide
mechanisms for effective therapeutic treatments, as well as
detection and prevention, particularly in areas of palliation
of disease symptoms and pain management;
(D) participants in the National Mesothelioma Registry and
Tissue Bank under subsection (c)
[[Page S815]]
and the annual International Mesothelioma Symposium under
subsection (d)(2)(E);
(E) with respect to research and treatment efforts,
coordinated with other centers and institutions involved in
exemplary mesothelioma research and treatment;
(F) able to facilitate transportation and lodging for
mesothelioma patients, so as to enable patients to
participate in the newest developing treatment protocols, and
to enable the centers to recruit patients in numbers
sufficient to conduct necessary clinical trials; and
(G) nonprofit hospitals, universities, or medical or
research institutions incorporated or organized in the United
States.
(c) Mesothelioma Registry and Tissue Bank.--
(1) Establishment.--The Administrator shall make available
$1,000,000 from the Fund, and the Director of the National
Institutes of Health shall make available $1,000,000 from
amounts available to the Director, for each of fiscal years
2006 through 2015 for the establishment, maintenance, and
operation of a National Mesothelioma Registry to collect data
regarding symptoms, pathology, evaluation, treatment,
outcomes, and quality of life and a Tissue Bank to include
the pre- and post-treatment blood (serum and blood cells)
specimens as well as tissue specimens from biopsies and
surgery. Not less than $500,000 of the amount made available
under the preceding sentence in each fiscal year shall be
allocated for the collection and maintenance of tissue
specimens.
(2) Requirements.--The Director of the National Institutes
of Health, with the advice and consent of the Medical
Advisory Committee, shall conduct a competitive peer review
process to select a site to administer the Registry and
Tissue Bank described in paragraph (1). The Director shall
ensure that the site selected under this paragraph--
(A) is available to all mesothelioma patients and
qualifying physicians throughout the United States;
(B) is subject to all applicable medical and patient
privacy laws and regulations;
(C) is carrying out activities to ensure that data is
accessible via the Internet; and
(D) provides data and tissue samples to qualifying
researchers and physicians who apply for such data in order
to further the understanding, prevention, screening,
diagnosis, or treatment of malignant mesothelioma.
(d) Center for Mesothelioma Education.--
(1) Establishment.--The Administrator shall make available
$1,000,000 from the Fund, and the Director of the National
Institutes of Health shall make available $1,000,000 from
amounts available to the Director, for each of fiscal years
2006 through 2015 for the establishment, with the advice and
consent of the Medical Advisory Committee, of a Center for
Mesothelioma Education (referred to in this section as the
``Center'') to--
(A) promote mesothelioma awareness and education;
(B) assist mesothelioma patients and their family members
in obtaining necessary information; and
(C) work with the centers established under subsection (b)
in advancing mesothelioma research.
(2) Activities.--The Center shall--
(A) educate the public about the new initiatives contained
in this section through a National Mesothelioma Awareness
Campaign;
(B) develop and maintain a Mesothelioma Educational
Resource Center (referred to in this section as the
``MERCI''), that is accessible via the Internet, to provide
mesothelioma patients, family members, and front-line
physicians with comprehensive, current information on
mesothelioma and its treatment, as well as on the existence
of, and general claim procedures for the Asbestos Injury
Claims Resolution Fund;
(C) through the MERCI and otherwise, educate mesothelioma
patients, family members, and front-line physicians about,
and encourage such individuals to participate in, the centers
established under subsection (b), the Registry and the Tissue
Bank;
(D) complement the research efforts of the centers
established under subsection (b) by awarding competitive,
peer-reviewed grants for the training of clinical specialist
fellows in mesothelioma, and for highly innovative,
experimental or pre-clinical research; and
(E) conduct an annual International Mesothelioma Symposium.
(3) Requirements.--The Center shall--
(A) be a nonprofit corporation under section 501(c)(3) of
the Internal Revenue Code of 1986;
(B) be a separate entity from and not an affiliate of any
hospital, university, or medical or research institution; and
(C) demonstrate a history of program spending that is
devoted specifically to the mission of extending the survival
of current and future mesothelioma patients, including a
history of soliciting, peer reviewing through a competitive
process, and funding research grant applications relating to
the detection, prevention, treatment, and cure of
mesothelioma.
(4) Contracts for oversight.--The Director of the National
Institutes of Health may enter into contracts with the Center
for the selection and oversight of the centers established
under subsection (b), or selection of the director of the
Registry and the Tissue Bank under subsection (c) and
oversight of the Registry and the Tissue Bank.
(e) Report and Recommendations.--Not later than September
30, 2015, The Director of the National Institutes of Health
shall, after opportunity for public comment and review,
publish and provide to Congress a report and recommendations
on the results achieved and information gained through the
Program, including--
(1) information on the status of mesothelioma as a national
health issue, including--
(A) annual United States incidence and death rate
information and whether such rates are increasing or
decreasing;
(B) the average prognosis; and
(C) the effectiveness of treatments and means of
prevention;
(2) promising advances in mesothelioma treatment and
research which could be further developed if the Program is
reauthorized; and
(3) a summary of advances in mesothelioma treatment made in
the 10-year period prior to the report and whether those
advances would justify continuation of the Program and
whether it should be reauthorized for an additional 10 years.
(f) Severability.--If any provision of this Act, or
amendment made by this Act, or the application of such
provision or amendment to any person or circumstance is held
to be unconstitutional, the remainder of this Act (including
this section), the amendments made by this Act, and the
application of the provisions of such to any person or
circumstance shall not be affected thereby.
(g) Regulations.--The Director of the National Institutes
of Health shall promulgate regulations to provide for the
implementation of this section.
TITLE III--JUDICIAL REVIEW
SEC. 301. JUDICIAL REVIEW OF RULES AND REGULATIONS.
(a) Exclusive Jurisdiction.--The United States Court of
Appeals for the District of Columbia Circuit shall have
exclusive jurisdiction over any action to review rules or
regulations promulgated by the Administrator or the Asbestos
Insurers Commission under this Act.
(b) Period for Filing Petition.--A petition for review
under this section shall be filed not later than 60 days
after the date notice of such promulgation appears in the
Federal Register.
(c) Expedited Procedures.--The United States Court of
Appeals for the District of Columbia shall provide for
expedited procedures for reviews under this section.
SEC. 302. JUDICIAL REVIEW OF AWARD DECISIONS.
(a) In General.--Any claimant adversely affected or
aggrieved by a final decision of the Administrator awarding
or denying compensation under title I may petition for
judicial review of such decision. Any petition for review
under this section shall be filed within 90 days of the
issuance of a final decision of the Administrator.
(b) Exclusive Jurisdiction.--A petition for review may only
be filed in the United States Court of Appeals for the
circuit in which the claimant resides at the time of the
issuance of the final order.
(c) Standard of Review.--The court shall uphold the
decision of the Administrator unless the court determines,
upon review of the record as a whole, that the decision is
not supported by substantial evidence, is contrary to law, or
is not in accordance with procedure required by law.
(d) Expedited Procedures.--The United States Court of
Appeals shall provide for expedited procedures for reviews
under this section.
SEC. 303. JUDICIAL REVIEW OF PARTICIPANTS' ASSESSMENTS.
(a) Exclusive Jurisdiction.--The United States Court of
Appeals for the District of Columbia Circuit shall have
exclusive jurisdiction over any action to review a final
determination by the Administrator or the Asbestos Insurers
Commission regarding the liability of any person to make a
payment to the Fund, including a notice of applicable subtier
assignment under section 204(i), a notice of financial
hardship or inequity determination under section 204(d), a
notice of a distributor's adjustment under section 204(m),
and a notice of insurer participant obligation under section
212(b).
(b) Period for Filing Action.--A petition for review under
subsection (a) shall be filed not later than 60 days after a
final determination by the Administrator or the Commission
giving rise to the action. Any defendant participant who
receives a notice of its applicable subtier under section
204(i) [or], a notice of financial hardship or inequity
determination under section 204(d), or a notice of a
distributor's adjustment under section 204(m), shall commence
any action within 30 days after a decision on rehearing under
section 204(i)(10), and any insurer participant who receives
a notice of a payment obligation under section 212(b) shall
commence any action within 30 days after receiving such
notice. The court shall give such action expedited
consideration.
SEC. 304. OTHER JUDICIAL CHALLENGES.
(a) Exclusive Jurisdiction.--The United States District
Court for the District of Columbia shall have exclusive
jurisdiction over any action for declaratory or injunctive
relief challenging any provision of this Act. An action under
this section shall be filed not later than 60 days after the
date of enactment of this Act or 60 days after the final
action by the Administrator or the Commission giving rise to
the action, whichever is later.
(b) Direct Appeal.--A final decision in the action shall be
reviewable on appeal directly to the Supreme Court of the
United States. Such appeal shall be taken by the filing of a
notice of appeal within 30 days, and the filing of a
jurisdictional statement within 60 days, of the entry of the
final decision.
(c) Expedited Procedures.--It shall be the duty of the
United States District Court for the District of Columbia and
the Supreme Court of the United States to advance on the
[[Page S816]]
docket and to expedite to the greatest possible extent the
disposition of the action and appeal.
SEC. 305. STAYS, EXCLUSIVITY, AND CONSTITUTIONAL REVIEW.
(a) No Stays.--
(1) Payments.--No court may issue a stay of payment by any
party into the Fund pending its final judgment.
(2) Legal challenges.--No court may issue a stay or
injunction pending final judicial action, including the
exhaustion of all appeals, on a legal challenge to this Act
or any portion of this Act.
(b) Exclusivity of Review.--An action of the Administrator
or the Asbestos Insurers Commission for which review could
have been obtained under section 301, 302, or 303 shall not
be subject to judicial review in any other proceeding.
(c) Constitutional Review.--
[(1) In general.--Notwithstanding any other provision of
law, any interlocutory or final judgment, decree, or order of
a Federal court holding this Act, or any provision or
application thereof, unconstitutional shall be reviewable as
a matter of right by direct appeal to the Supreme Court.]
(1) In general.--The United States District Court for the
District of Columbia shall have exclusive jurisdiction over
any action challenging the constitutionality of any provision
or application of this Act. The following rules shall apply:
(A) The action shall be filed in the United States District
Court for the District of Columbia and shall be heard by a 3-
judge court convened under section 2284 of title 28, United
States Code.
(B) A final decision in the action shall be reviewable only
by appeal directly to the Supreme Court of the United States.
Such appeal shall be taken by the filing of a notice of
appeal within 10 days, and the filing of a jurisdictional
statement within 30 days, after the entry of the final
decision.
(C) It shall be the duty of the United States District
Court for the District of Columbia and the Supreme Court of
the United States to advance on the docket and to expedite to
the greatest possible extent the disposition of the action
and appeal.
[(2) Period for filing appeal.--Any such appeal shall be
filed not more than 30 days after entry of such judgment,
decree, or order.]
[(3)](2) Repayment to asbestos trust and class action
trust.--If the transfer of the assets of any asbestos trust
of a debtor or any class action trust (or this Act as a
whole) is held to be unconstitutional or otherwise unlawful,
the Fund shall transfer the remaining balance of such assets
(determined under section 405(f)(1)(A)(iii)) back to the
appropriate asbestos trust or class action trust within 90
days after final judicial action on the legal challenge,
including the exhaustion of all appeals.
TITLE IV--MISCELLANEOUS PROVISIONS
SEC. 401. FALSE INFORMATION.
(a) In General.--Chapter 63 of title 18, United States
Code, is amended by adding at the end the following:
[``Sec. 1348. Fraud and false statements in connection with
participation in Asbestos Injury Claims Resolution Fund
[``(a) Fraud Relating to Asbestos Injury Claims Resolution
Fund.--Whoever knowingly and willfully executes, or attempts
to execute, a scheme or artifice to defraud the Office of
Asbestos Disease Compensation or the Asbestos Insurers
Commission under title II of the Fairness in Asbestos Injury
Resolution Act of 2005 shall be fined under this title or
imprisoned not more than 20 years, or both.
[``(b) False Statement Relating to Asbestos Injury Claims
Resolution Fund.--Whoever, in any matter involving the Office
of Asbestos Disease Compensation or the Asbestos Insurers
Commission, knowingly and willfully--
[``(1) falsifies, conceals, or covers up by any trick,
scheme, or device a material fact;
[``(2) makes any materially false, fictitious, or
fraudulent statements or representations; or
[``(3) makes or uses any false writing or document knowing
the same to contain any materially false, fictitious, or
fraudulent statement or entry, in connection with the award
of a claim or the determination of a participant's payment
obligation under title I or II of the Fairness in Asbestos
Injury Resolution Act of 2005 shall be fined under this title
or imprisoned not more than 10 years, or both.''.
[(b) Technical and Conforming Amendment.--The table of
sections for chapter 63 of title 18, United States Code, is
amended by adding at the end the following:
[``1348. Fraud and false statements in connection with participation in
Asbestos Injury Claims Resolution Fund.''.]
``Sec. 1351. Fraud and false statements in connection with
participation in Asbestos Injury Claims Resolution Fund
``(a) Fraud Relating to Asbestos Injury Claims Resolution
Fund.--Whoever knowingly and willfully executes, or attempts
to execute, a scheme or artifice to defraud the Office of
Asbestos Disease Compensation or the Asbestos Insurers
Commission under title II of the Fairness in Asbestos Injury
Resolution Act of 2005 shall be fined under this title or
imprisoned not more than 20 years, or both.
``(b) False Statement Relating to Asbestos Injury Claims
Resolution Fund.--
``(1) In general.--It shall be unlawful for any person, in
any matter involving the Office of Asbestos Disease
Compensation or the Asbestos Insurers Commission, to
knowingly and willfully--
``(A) falsify, conceal, or cover up by any trick, scheme,
or device a material fact;
``(B) make any materially false, fictitious, or fraudulent
statement or representation; or
``(C) make or use any false writing or document knowing the
same to contain any materially false, fictitious, or
fraudulent statement or entry, in connection with the award
of a claim or the determination of a participant's payment
obligation under title I or II of the Fairness in Asbestos
Injury Resolution Act of 2005.
``(2) Penalty.--A person who violates this subsection shall
be fined under this title or imprisoned not more than 10
years, or both.''.
(b) Technical and Conforming Amendment.--The table of
sections for chapter 63 of title 18, United States Code, is
amended by adding at the end the following:
``1351. Fraud and false statements in connection with participation in
Asbestos Injury Claims Resolution Fund.''.
SEC. 402. EFFECT ON BANKRUPTCY LAWS.
(a) No Automatic Stay.--Section 362(b) of title 11, United
States Code, is amended--
(1) in paragraph (17), by striking ``or'' at the end;
(2) in paragraph (18), by striking the period at the end
and inserting ``; or''; and
(3) by inserting after paragraph (18) the following:
``(19) under subsection (a) of this section of the
enforcement of any payment obligations under section 204 of
the Fairness in Asbestos Injury Resolution Act of 2005,
against a debtor, or the property of the estate of a debtor,
that is a participant (as that term is defined in section 3
of that Act).''.
(b) Assumption of Executory Contract.--Section 365 of title
11, United States Code, is amended by adding at the end the
following:
``(p) If a debtor is a participant (as that term is defined
in section 3 of the Fairness in Asbestos Injury Resolution
Act of 2005), the trustee shall be deemed to have assumed all
executory contracts entered into by the participant under
section 204 of that Act. The trustee may not reject any such
executory contract.''.
(c) Allowed Administrative Expenses.--Section 503 of title
11, United States Code, is amended by adding at the end the
following:
``(c)(1) Claims or expenses of the United States, the
Attorney General, or the Administrator (as that term is
defined in section 3 of the Fairness in Asbestos Injury
Resolution Act of 2005) based upon the asbestos payment
obligations of a debtor that is a Participant (as that term
is defined in section 3 of that Act), shall be paid as an
allowed administrative expense. The debtor shall not be
entitled to either notice or a hearing with respect to such
claims.
``(2) For purposes of paragraph (1), the term `asbestos
payment obligation' means any payment obligation under title
II of the Fairness in Asbestos Injury Resolution Act of
2005.''.
(d) No Discharge.--Section 523 of title 11, United States
Code, is amended by adding at the end the following:
``(f) A discharge under section 727, 1141, 1228, or 1328 of
this title does not discharge any debtor that is a
participant (as that term is defined in section 3 of the
Fairness in Asbestos Injury Resolution Act of 2005) of the
debtor's payment obligations assessed against the participant
under title II of that Act.''.
(e) Payment.--Section 524 of title 11, United States Code,
is amended by adding at the end the following:
``(i) Participant Debtors.--
``(1) In general.--Paragraphs (2) and (3) shall apply to a
debtor who--
``(A) is a participant that has made prior asbestos
expenditures (as such terms are defined in the Fairness in
Asbestos Injury Resolution Act of 2005); and
``(B) is subject to a case under this title that is
pending--
``(i) on the date of enactment of the Fairness in Asbestos
Injury Resolution Act of 2005; or
``(ii) at any time during the 1-year period preceding the
date of enactment of that Act.
``(2) Tier i debtors.--A debtor that has been assigned to
Tier I under section 202 of the Fairness in Asbestos Injury
Resolution Act of 2005, shall make payments in accordance
with sections 202 and 203 of that Act.
``(3) Treatment of payment obligations.--All payment
obligations of a debtor under sections 202 and 203 of the
Fairness in Asbestos Injury Resolution Act of 2005 shall--
``(A) constitute costs and expenses of administration of a
case under section 503 of this title;
``(B) notwithstanding any case pending under this title, be
payable in accordance with section 202 of that Act;
``(C) not be stayed;
``(D) not be affected as to enforcement or collection by
any stay or injunction of any court; and
``(E) not be impaired or discharged in any current or
future case under this title.''.
(f) Treatment of Trusts.--Section 524 of title 11, United
States Code, as amended by this Act, is amended by adding at
the end the following:
``(j) Asbestos Trusts.--
``(1) In general.--A trust shall assign a portion of the
corpus of the trust to the Asbestos Injury Claims Resolution
Fund (referred to in this subsection as the `Fund') as
[[Page S817]]
established under the Fairness in Asbestos Injury Resolution
Act of 2005 if the trust qualifies as a `trust' under section
201 of that Act.
``(2) Transfer of trust assets.--
``(A) In general.--
``(i) Except as provided under subparagraphs (B), (C), and
(E), the assets in any trust established to provide
compensation for asbestos claims (as defined in section 3 of
the Fairness in Asbestos Injury Resolution Act of 2005) shall
be transferred to the Fund not later than [6 months] 90 days
after the date of enactment of the Fairness in Asbestos
Injury Resolution Act of 2005 or 30 days following funding of
a trust established under a reorganization plan subject to
section 202(c) of that Act. Except as provided under
subparagraph (B), the Administrator of the Fund shall accept
such assets and utilize them for any purposes of the Fund
under section 221 of such Act, including the payment of
claims for awards under such Act to beneficiaries of the
trust from which the assets were transferred.
``(ii) Notwithstanding any other provision of Federal or
State law, no liability of any kind may be imposed on a
trustee of a trust for transferring assets to the Fund in
accordance with clause (i).
``(B) Authority to refuse assets.--The Administrator of the
Fund may refuse to accept any asset that the Administrator
determines may create liability for the Fund in excess of the
value of the asset.
``(C) Allocation of trust assets.--If a trust under
subparagraph (A) has beneficiaries with claims that are not
asbestos claims, the assets transferred to the Fund under
subparagraph (A) shall not include assets allocable to such
beneficiaries. The trustees of any such trust shall determine
the amount of such trust assets to be reserved for the
continuing operation of the trust in processing and paying
claims that are not asbestos claims. The trustees shall
demonstrate to the satisfaction of the Administrator, or by
clear and convincing evidence in a proceeding brought before
the United States District Court for the District of Columbia
in accordance with paragraph (4), that the amount reserved is
properly allocable to claims other than asbestos claims.
``(D) Sale of fund assets.--The investment requirements
under section 222 of the Fairness in Asbestos Injury
Resolution Act of 2005 shall not be construed to require the
Administrator of the Fund to sell assets transferred to the
Fund under subparagraph (A).
``(E) Liquidated claims.--Except as specifically provided
in this subparagraph, all asbestos claims against a trust are
superseded and preempted as of the date of enactment of the
Fairness in Asbestos Injury Resolution Act of 2005, and a
trust shall not make any payment relating to asbestos claims
after that date. If, in the ordinary course and the normal
and usual administration of the trust consistent with past
practices, a trust had before the date of enactment of the
Fairness in Asbestos Injury Resolution Act of 2005, made all
determinations necessary to entitle an individual claimant to
a noncontingent cash payment from the trust, the trust shall
(i) make any lump-sum cash payment due to that claimant, and
(ii) make or provide for all remaining noncontingent payments
on any award being paid or scheduled to be paid on an
installment basis, in each case only to the same extent that
the trust would have made such cash payments in the ordinary
course and consistent with past practices before enactment of
that Act. A trust shall not make any payment in respect of
any alleged contingent right to recover any greater amount
than the trust had already paid, or had completed all
determinations necessary to pay, to a claimant in cash in
accordance with its ordinary distribution procedures in
effect as of June 1, 2003.
``(3) Injunction.--
``(A) In general.--Any injunction issued as part of the
formation of a trust described in paragraph (1) shall remain
in full force and effect. No court, Federal or State, may
enjoin the transfer of assets by a trust to the Fund in
accordance with this subsection pending resolution of any
litigation challenging such transfer or the validity of this
subsection or of any provision of the Fairness in Asbestos
Injury Resolution Act of 2005, and an interlocutory order
denying such relief shall not be subject to immediate appeal
under section 1291(a) of title 28.
``(B) Availability of fund assets.--Notwithstanding any
other provision of law, once such a transfer has been made,
the assets of the Fund shall be available to satisfy any
final judgment entered in such an action and such transfer
shall no longer be subject to any appeal or review--
``(i) declaring that the transfer effected a taking of a
right or property for which an individual is constitutionally
entitled to just compensation; or
``(ii) requiring the transfer back to a trust of any or all
assets transferred by that trust to the Fund.
``(4) Jurisdiction.--Solely for purposes of implementing
this subsection, personal jurisdiction over every covered
trust, the trustees thereof, and any other necessary party,
and exclusive subject matter jurisdiction over every question
arising out of or related to this subsection, shall be vested
in the United States District Court for the District of
Columbia. Notwithstanding any other provision of law,
including section 1127 of this title, that court may make any
order necessary and appropriate to facilitate prompt
compliance with this subsection, including assuming
jurisdiction over and modifying, to the extent necessary, any
applicable confirmation order or other order with continuing
and prospective application to a covered trust. The court may
also resolve any related challenge to the constitutionality
of this subsection or of its application to any trust,
trustee, or individual claimant. The Administrator of the
Fund may bring an action seeking such an order or
modification, under the standards of rule 60(b) of the
Federal Rules of Civil Procedure or otherwise, and shall be
entitled to intervene as of right in any action brought by
any other party seeking interpretation, application, or
invalidation of this subsection. Any order denying relief
that would facilitate prompt compliance with the transfer
provisions of this subsection shall be subject to immediate
appeal under section 304 of the Fairness in Asbestos Injury
Resolution Act of 2005. Notwithstanding any other provision
of this paragraph, for purposes of implementing the sunset
provisions of section 402(f) of such Act which apply to
asbestos trusts and the class action trust, the bankruptcy
court or United States district court having jurisdiction
over any such trust as of the date of enactment of such Act
shall retain such jurisdiction.''.
(g) No Avoidance of Transfer.--Section 546 of title 11,
United States Code, is amended by adding at the end the
following:
``(h) Notwithstanding the rights and powers of a trustee
under sections 544, 545, 547, 548, 549, and 550 of this
title, if a debtor is a participant (as that term is defined
in section 3 of the Fairness in Asbestos Injury Resolution
Act of 2005), the trustee may not avoid a transfer made by
the debtor under its payment obligations under section 202 or
203 of that Act.''.
(h) Confirmation of Plan.--Section 1129(a) of title 11,
United States Code, is amended by adding at the end the
following:
``(14) If the debtor is a participant (as that term is
defined in section 3 of the Fairness in Asbestos Injury
Resolution Act of 2005), the plan provides for the
continuation after its effective date of payment of all
payment obligations under title II of that Act.''.
(i) Effect on Insurance Receivership Proceedings.--
(1) Lien.--In an insurance receivership proceeding
involving a direct insurer, reinsurer or runoff participant,
there shall be a lien in favor of the Fund for the amount of
any assessment and any such lien shall be given priority over
all other claims against the participant in receivership,
except for the expenses of administration of the receivership
and the perfected claims of the secured creditors. Any State
law that provides for priorities inconsistent with this
provision is preempted by this Act.
(2) Payment of assessment.--Payment of any assessment
required by this Act shall not be subject to any automatic or
judicially entered stay in any insurance receivership
proceeding. This Act shall preempt any State law requiring
that payments by a direct insurer, reinsurer or runoff
participant in an insurance receivership proceeding be
approved by a court, receiver or other person. Payments of
assessments by any direct insurer or reinsurer participant
under this Act shall not be subject to the avoidance powers
of a receiver or a court in or relating to an insurance
receivership proceeding.
(j) Standing in Bankruptcy Proceedings.--The Administrator
shall have standing in any bankruptcy case involving a debtor
participant. No bankruptcy court may require the
Administrator to return property seized to satisfy
obligations to the Fund.
SEC. 403. EFFECT ON OTHER LAWS AND EXISTING CLAIMS.
(a) Effect on Federal and State Law.--The provisions of
this Act shall supersede any Federal or State law insofar as
such law may relate to any asbestos claim, including any
claim described under subsection (e)(2).
(b) Effect on Silica Claims.--
(1) In general.--
(A) Rule of construction.--Nothing in this Act shall be
construed to preempt, bar, or otherwise preclude any personal
injury claim attributable to exposure to silica as to which
the plaintiff--
(i) pleads with particularity and establishes by a
preponderance of evidence either that--
(I) no claim has been asserted or filed by or with respect
to the exposed person in any forum for any asbestos-related
condition and the exposed person (or another claiming on
behalf of or through the exposed person) is not eligible for
any monetary award under this Act; or
(II)(aa) the exposed person suffers or has suffered a
functional impairment that was caused by exposure to silica;
and
(bb) asbestos exposure was not a substantial contributing
factor to such functional impairment; and
(ii) satisfies the requirements of paragraph (2).
(B) Preemption.--Claims attributable to exposure to silica
that fail to meet the requirements of subparagraph (A) shall
be preempted by this Act.
(2) Required evidence.--
(A) In general.--In any claim to which paragraph (1)
applies, the initial pleading (or, for claims pending on the
date of enactment of this Act, an amended pleading to be
filed within 60 days after such date, but not later than 60
days before trial, shall plead
[[Page S818]]
with particularity the elements of subparagraph (A)(i)(I) or
(II) and shall be accompanied by the information described
under subparagraph (B)(i) through (iv).
(B) Pleadings.--If the claim pleads the elements of
paragraph (1)(A)(i)(II) and by the information described
under clauses (i) through (iv) of this subparagraph if the
claim pleads the elements of paragraph (1)(A)(i)(I)--
(i) admissible evidence, including at a minimum, a B-
reader's report, the underlying x-ray film and such other
evidence showing that the claim may be maintained and is not
preempted under paragraph (1);
(ii) notice of any previous lawsuit or claim for benefits
in which the exposed person, or another claiming on behalf of
or through the injured person, asserted an injury or
disability based wholly or in part on exposure to asbestos;
(iii) if known by the plaintiff after reasonable inquiry by
the plaintiff or his representative, the history of the
exposed person's exposure, if any, to asbestos; and
(iv) copies of all medical and laboratory reports
pertaining to the exposed person that refer to asbestos or
asbestos exposure.
(3) Statute of limitations.--In general, the statute of
limitations for a silica claim shall be governed by
applicable State law, except that in any case under this
subsection, the statute of limitations shall only start to
run when the plaintiff becomes impaired.
(c) Superseding Provisions.--
(1) In general.--Except as provided under paragraph (3) and
section 106(f), any agreement, understanding, or undertaking
by any person or affiliated group with respect to the
treatment of any asbestos claim that requires future
performance by any party, insurer of such party, settlement
administrator, or escrow agent shall be superseded in its
entirety by this Act.
(2) No force or effect.--Except as provided under paragraph
(3), any such agreement, understanding, or undertaking by any
such person or affiliated group shall be of no force or
effect, and no person shall have any rights or claims with
respect to any such agreement, understanding, or undertaking.
(3) Exception.--
(A) In general.--Except as provided in section 202(f),
nothing in this Act shall abrogate a binding and legally
enforceable written settlement agreement between any
defendant participant or its insurer and a specific named
plaintiff with respect to the settlement of an asbestos claim
of the plaintiff if--
[(i) before the date of enactment of this Act, the
settlement agreement was executed directly by the settling
defendant or the settling insurer and the individual
plaintiff, or on behalf of the plaintiff where the plaintiff
is incapacitated and the settlement agreement is signed by an
authorized legal representative;]
(i) before the date of enactment of this Act, the
settlement agreement was executed by--
(I) the settling defendant or the settling insurer; and
(II)(aa) the specific individual plaintiff, or the
individual's immediate relatives; or
(bb) an authorized legal representative acting on behalf of
the plaintiff where the plaintiff is incapacitated and the
settlement agreement is signed by that authorized legal
representative;
(ii) the settlement agreement contains an express
obligation by the settling defendant or settling insurer to
make a future direct monetary payment or payments in a fixed
amount or amounts to the individual plaintiff; and
(iii) within 30 days after the date of enactment of this
Act, or such shorter time period specified in the settlement
agreement, all conditions to payment under the settlement
agreement have been fulfilled, so that the only remaining
performance due under the settlement agreement is the payment
or payments by the settling defendant or the settling
insurer.
(B) Bankruptcy-related agreements.--The exception set forth
in this paragraph shall not apply to any bankruptcy-related
agreement.
(C) Collateral source.--Any settlement payment under this
section is a collateral source if the plaintiff seeks
recovery from the Fund.
(D) Abrogation.--Nothing in subparagraph (A) shall abrogate
a settlement agreement otherwise satisfying the requirements
of that subparagraph if such settlement agreement expressly
anticipates the enactment of this Act and provides for the
effects of this Act.
(E) Health care insurance or expenses settlements.--Nothing
in this Act shall abrogate or terminate an otherwise fully
enforceable settlement agreement which was executed before
the date of enactment of this Act directly by the settling
defendant or the settling insurer and a specific named
plaintiff to pay the health care insurance or health care
expenses of the plaintiff.
(d) Exclusive Remedy.--
(1) In general.--Except as provided under paragraph (2) and
section 106(f), the remedies provided under this Act shall be
the exclusive remedy for any asbestos claim, including any
claim described in subsection (e)(2), under any Federal or
State law.
(2) Civil actions at trial.--
(A) In general.--This Act shall not apply to any asbestos
claim that--
(i) is a civil action filed in a Federal or State court
(not including a filing in a bankruptcy court);
(ii) is not part of a consolidation of actions or a class
action; and
(iii) on the date of enactment of this Act--
(I) in the case of a civil action which includes a jury
trial, is before the jury after its impanelling and
commencement of presentation of evidence, but before its
deliberations;
(II) in the case of a civil action which includes a trial
in which a judge is the trier of fact, is at the presentation
of evidence at trial; or
(III) a verdict, final order, or final judgment has been
entered by a trial court.
(B) Nonapplicability.--This Act shall not apply to a civil
action described under subparagraph (A) throughout the final
disposition of the action.
(e) Bar on Asbestos Claims.--
(1) In general.--No asbestos claim (including any claim
described in paragraph (2)) may be pursued, and no pending
asbestos claim may be maintained, in any Federal or State
court, except as provided under subsection (d)(2) and section
106(f).
(2) Certain specified claims.--
(A) In general.--Subject to section 404 (d) and (e)(3) of
this Act, no claim may be brought or pursued in any Federal
or State court or insurance receivership proceeding--
(i) relating to any default, confessed or stipulated
judgment on an asbestos claim if the judgment debtor
expressly agreed, in writing or otherwise, not to contest the
entry of judgment against it and the plaintiff expressly
agreed, in writing or otherwise, to seek satisfaction of the
judgment only against insurers or in bankruptcy;
(ii) relating to the defense, investigation, handling,
litigation, settlement, or payment of any asbestos claim by
any participant, including claims for bad faith or unfair or
deceptive claims handling or breach of any duties of good
faith; or
(iii) arising out of or relating to the asbestos-related
injury of any individual and--
(I) asserting any conspiracy, concert of action, aiding or
abetting, act, conduct, statement, misstatement, undertaking,
publication, omission, or failure to detect, speak, disclose,
publish, or warn relating to the presence or health effects
of asbestos or the use, sale, distribution, manufacture,
production, development, inspection, advertising, marketing,
or installation of asbestos; or
(II) asserting any conspiracy, act, conduct, statement,
omission, or failure to detect, disclose, or warn relating to
the presence or health effects of asbestos or the use, sale,
distribution, manufacture, production, development,
inspection, advertising, marketing, or installation of
asbestos, asserted as or in a direct action against an
insurer or reinsurer based upon any theory, statutory,
contract, tort, or otherwise; or
(iv) by any third party, and premised on any theory,
allegation, or cause of action, for reimbursement of
healthcare costs allegedly associated with the use of or
exposure to asbestos, whether such claim is asserted
directly, indirectly or derivatively.
(B) Exceptions.--Subparagraph (A) (ii) and (iii) shall not
apply to claims against participants by persons--
(i) with whom the participant is in privity of contract;
(ii) who have received an assignment of insurance rights
not otherwise voided by this Act; or
(iii) who are beneficiaries covered by the express terms of
a contract with that participant.
(3) Preemption.--Any action asserting an asbestos claim
(including a claim described in paragraph (2)) in any Federal
or State court is preempted by this Act, except as provided
under subsection (d)(2) and section 106(f).
(4) Dismissal.--Except as provided under subsection (d)(2),
no judgment other than a judgment of dismissal may be entered
in any such action, including an action pending on appeal, or
on petition or motion for discretionary review, on or after
the date of enactment of this Act. A court may dismiss any
such action on its motion. If the court denies the motion to
dismiss, it shall stay further proceedings until final
disposition of any appeal taken under this Act.
(5) Removal.--
(A) In general.--If an action in any State court under
paragraph (3) is preempted, barred, or otherwise precluded
under this Act, and not dismissed, or if an order entered
after the date of enactment of this Act purporting to enter
judgment or deny review is not rescinded and replaced with an
order of dismissal within 30 days after the filing of a
motion by any party to the action advising the court of the
provisions of this Act, any party may remove the case to the
district court of the United States for the district in which
such action is pending.
(B) Time limits.--For actions originally filed after the
date of enactment of this Act, the notice of removal shall be
filed within the time limits specified in section 1441(b) of
title 28, United States Code.
(C) Procedures.--The procedures for removal and proceedings
after removal shall be in accordance with sections 1446
through 1450 of title 28, United States Code, except as may
be necessary to accommodate removal of any actions pending
(including on appeal) on the date of enactment of this Act.
(D) Review of remand orders.--
(i) In general.--Section 1447 of title 28, United States
Code, shall apply to any removal of a case under this
section, except that notwithstanding subsection (d) of that
section, a court of appeals may accept an appeal from an
order of a district court granting or denying a motion to
remand an action
[[Page S819]]
to the State court from which it was removed if application
is made to the court of appeals not less than 7 days after
entry of the order.
(ii) Time period for judgment.--If the court of appeals
accepts an appeal under clause (i), the court shall complete
all action on such appeal, including rendering judgment, not
later than 60 days after the date on which such appeal was
filed, unless an extension is granted under clause (iii).
(iii) Extension of time period.--The court of appeals may
grant an extension of the 60-day period described in clause
(ii) if--
(I) all parties to the proceeding agree to such extension,
for any period of time; or
(II) such extension is for good cause shown and in the
interests of justice, for a period not to exceed 10 days.
(iv) Denial of appeal.--If a final judgment on the appeal
under clause (i) is not issued before the end of the period
described in clause (ii), including any extension under
clause (iii), the appeal shall be denied.
(E) Jurisdiction.--The jurisdiction of the district court
shall be limited to--
(i) determining whether removal was proper; and
(ii) determining, based on the evidentiary record, whether
the claim presented is preempted, barred, or otherwise
precluded under this Act.
(6) Credits.--
(A) In general.--If, notwithstanding the express intent of
Congress stated in this section, any court finally determines
for any reason that an asbestos claim is not barred under
this subsection and is not subject to the exclusive remedy or
preemption provisions of this section, then any participant
required to satisfy a final judgment executed with respect to
any such claim may elect to receive a credit against any
assessment owed to the Fund equal to the amount of the
payment made with respect to such executed judgment.
(B) Requirements.--The Administrator shall require
participants seeking credit under this paragraph to
demonstrate that the participant--
(i) timely pursued all available remedies, including
remedies available under this paragraph to obtain dismissal
of the claim; and
(ii) notified the Administrator at least 20 days before the
expiration of any period within which to appeal the denial of
a motion to dismiss based on this section.
(C) Information.--The Administrator may require a
participant seeking credit under this paragraph to furnish
such further information as is necessary and appropriate to
establish eligibility for, and the amount of, the credit.
(D) Intervention.--The Administrator may intervene in any
action in which a credit may be due under this paragraph.
SEC. 404. EFFECT ON INSURANCE AND REINSURANCE CONTRACTS.
(a) Erosion of Insurance Coverage Limits.--
(1) Definitions.--In this section, the following
definitions shall apply:
(A) Deemed erosion amount.--The term ``deemed erosion
amount'' means the amount of erosion deemed to occur at
enactment under paragraph (2).
(B) Early sunset.--The term ``early sunset'' means an event
causing termination of the program under section 405(f) which
relieves the insurer participants of paying some portion of
the aggregate payment level of $46,025,000,000 required under
section 212(a)(2)(A).
(C) Earned erosion amount.--The term ``earned erosion
amount'' means, in the event of any early sunset under
section 405(f), the percentage, as set forth in the following
schedule, depending on the year in which the defendant
participants' funding obligations end, of those amounts
which, at the time of the early sunset, a defendant
participant has paid to the fund and remains obligated to pay
into the fund.
Year After Enactment In Which Defendant Participant's Funding
Obligation Ends:
Applicable 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 ....
(D) Remaining aggregate products limits.--The term
``remaining aggregate products limits'' means aggregate
limits that apply to insurance coverage granted under the
``products hazard'', ``completed operations hazard'', or
``Products--Completed Operations Liability'' in any
comprehensive general liability policy issued between
calendar years 1940 and 1986 to cover injury which occurs in
any State, as reduced by--
(i) any existing impairment of such aggregate limits as of
the date of enactment of this Act; and
(ii) the resolution of claims for reimbursement or coverage
of liability or paid or incurred loss for which notice was
provided to the insurer before the date of enactment of this
Act.
(E) Scheduled payment amounts.--The term ``scheduled
payment amounts'' means the future payment obligation to the
Fund under this Act from a defendant participant in the
amount established under sections 203 and 204.
(F) Unearned erosion amount.--The term ``unearned erosion
amount'' means, in the event of any early sunset under
section 405(f), the difference between the deemed erosion
amount and the earned erosion amount.
(2) Quantum and timing of erosion.--
(A) Erosion upon enactment.--The collective payment
obligations to the Fund of the insurer and reinsurer
participants as assessed by the Administrator shall be deemed
as of the date of enactment of this Act to erode remaining
aggregate products limits available to a defendant
participant only in an amount of 38.1 percent of each
defendant participant's scheduled payment amount.
(B) No assertion of claim.--No insurer or reinsurer may
assert any claim against a defendant participant or captive
insurer for insurance, reinsurance, payment of a deductible,
or retrospective premium adjustment arising out of that
insurer's or reinsurer's payments to the Fund or the erosion
deemed to occur under this section.
(C) Policies without certain limits or with exclusion.--
Except as provided under subparagraph (E), nothing in this
section shall require or permit the erosion of any insurance
policy or limit that does not contain an aggregate products
limit, or that contains an asbestos exclusion.
(D) Treatment of consolidation election.--If an affiliated
group elects consolidation as provided in section 204(f), the
total erosion of limits for the affiliated group under
paragraph (2)(A) shall not exceed [59.64] 38.1 percent of the
scheduled payment amount of the single payment obligation for
the entire affiliated group. The total erosion of limits for
any individual defendant participant in the affiliated group
shall not exceed its individual share of [59.64] 38.1 percent
of the affiliated group's scheduled payment amount, as
measured by the individual defendant participant's percentage
share of the affiliated group's prior asbestos expenditures.
(E) Rule of construction.--Notwithstanding any other
provision of this section, nothing in this Act shall be
deemed to erode remaining aggregate products limits of a
defendant participant that can demonstrate by a reponderance
of the evidence that 75 percent of its prior asbestos
expenditures were made in defense or satisfaction of asbestos
claims alleging bodily injury arising exclusively from the
exposure to asbestos at premises owned, rented, or controlled
by the defendant participant (a ``premises defendant''). In
calculating such percentage, where expenditures were made in
defense or satisfaction of asbestos claims alleging bodily
injury due to exposure to the defendant participant's
products and to asbestos at premises owned, rented, or
controlled by the defendant participant, half of such
expenditures shall be deemed to be for such premises
exposures. If a defendant participant establishes itself as a
premises defendant, 75 percent of the payments by such
defendant participant shall erode coverage limits, if any,
applicable to premises liabilities under applicable law.
(3) Method of erosion.--
(A) Allocation.--The amount of erosion allocated to each
defendant participant shall be allocated among periods in
which policies with remaining aggregate product limits are
available to that defendant participant pro rata by policy
period, in ascending order by attachment point.
(B) Other erosion methods.--
(i) In general.--Notwithstanding subparagraph (A), the
method of erosion of any remaining aggregate products limits
which are subject to--
(I) a coverage-in-place or settlement agreement between a
defendant participant and 1 or more insurance participants as
of the date of enactment; or
(II) a final and nonappealable judgment as of the date of
enactment or resulting from a claim for coverage or
reimbursement pending as of such date, shall be as specified
in such agreement or judgment with regard to erosion
applicable to such insurance participants' policies.
(ii) Remaining limits.--To the extent that a final
nonappealable judgment or settlement agreement to which an
insurer participant and a defendant participant are parties
in effect as of the date of enactment of this Act
extinguished a defendant participant's right to seek coverage
for asbestos claims under an insurer participant's policies,
any remaining limits in such policies shall not be considered
to be remaining aggregate products limits under subsection
(a)(1)(A).
(4) Restoration of aggregate products limits upon early
sunset.--
(A) Restoration.--In the event of an early sunset, any
unearned erosion amount will be
[[Page S820]]
deemed restored as aggregate products limits available to a
defendant participant as of the date of enactment.
(B) Method of restoration.--The unearned erosion amount
will be deemed restored to each defendant participant's
policies in such a manner that the last limits that were
deemed eroded at enactment under this subsection are deemed
to be the first limits restored upon early sunset.
(C) Tolling of coverage claims.--In the event of an early
sunset, the applicable statute of limitations and contractual
provisions for the filing of claims under any insurance
policy with restored aggregate products limits shall be
deemed tolled after the date of enactment through the date 6
months after the date of early sunset.
(5) Payments by defendant participant.--Payments made by a
defendant participant shall be deemed to erode, exhaust, or
otherwise satisfy applicable self-insured retentions,
deductibles, retrospectively rated premiums, and limits
issued by nonparticipating insolvent or captive insurance
companies. Reduction of remaining aggregate limits under this
subsection shall not limit the right of a defendant
participant to collect from any insurer not a participant.
(6) Effect on other insurance claims.--Other than as
specified in this subsection, this Act does not alter,
change, modify, or affect insurance for claims other than
asbestos claims.
(b) Dispute Resolution Procedure.--
(1) Arbitration.--The parties to a dispute regarding the
erosion of insurance coverage limits under this section may
agree in writing to settle such dispute by arbitration. Any
such provision or agreement shall be valid, irrevocable, and
enforceable, except for any grounds that exist at law or in
equity for revocation of a contract.
(2) Title 9, united states code.--Arbitration of such
disputes, awards by arbitrators, and confirmation of awards
shall be governed by title 9, United States Code, to the
extent such title is not inconsistent with this section. In
any such arbitration proceeding, the erosion principles
provided for under this section shall be binding on the
arbitrator, unless the parties agree to the contrary.
(3) Final and binding award.--An award by an arbitrator
shall be final and binding between the parties to the
arbitration, but shall have no force or effect on any other
person. The parties to an arbitration may agree that in the
event a policy which is the subject matter of an award is
subsequently determined to be eroded in a manner different
from the manner determined by the arbitration in a judgment
rendered by a court of competent jurisdiction from which no
appeal can or has been taken, such arbitration award may be
modified by any court of competent jurisdiction upon
application by any party to the arbitration. Any such
modification shall govern the rights and obligations between
such parties after the date of such modification.
(c) Effect on Nonparticipants.--
(1) In general.--No insurance company or reinsurance
company that is not a participant, other than a captive
insurer, shall be entitled to claim that payments to the Fund
erode, exhaust, or otherwise limit the nonparticipant's
insurance or reinsurance obligations.
(2) Other claims.--Nothing in this Act shall preclude a
participant from pursuing any claim for insurance or
reinsurance from any person that is not a participant other
than a captive insurer.
(d) Finite Risk Policies Not Affected.--
(1) In general.--Notwithstanding any other provision of
this Act, except subject to section 212(a)(1)(D), this Act
shall not alter, affect or impair any rights or obligations
of--
(A) any party to an insurance contract that expressly
provides coverage for governmental charges or assessments
imposed to replace insurance or reinsurance liabilities in
effect on the date of enactment of this Act; or
(B) subject to paragraph (2), any person with respect to
any insurance [or reinsurance] purchased by a participant
after December 31, 1990, that expressly (but not necessarily
exclusively) provides coverage for asbestos liabilities,
including those policies commonly referred to as ``finite
risk'' policies.
(2) Limitation.--No person may assert that any amounts paid
to the Fund in accordance with this Act are covered by any
policy described under paragraph (1)(B) purchased by a
defendant participant, unless such policy specifically
provides coverage for required payments to a Federal trust
fund established by a Federal statute to resolve asbestos
injury claims.
(e) Effect on Certain Insurance and Reinsurance Claims.--
(1) No coverage for fund assessments.--[No] Subject to
section 212(a)(1)(D), no participant or captive insurer may
pursue an insurance or reinsurance claim against another
participant or captive insurer for payments to the Fund
required under this Act, except under a [contract] written
agreement specifically providing insurance [or reinsurance],
reinsurance, or other reimbursement for required payments to
a Federal trust fund established by a Federal statute to
resolve asbestos injury claims or, where applicable, under
finite risk policies under subsection (d).
(2) Certain insurance assignments voided.--Any assignment
of any rights to insurance coverage for asbestos claims to
any person who has asserted an asbestos claim before the date
of enactment of this Act, or to any trust, person, or other
entity not part of an affiliated group as defined in section
201(1) of this Act established or appointed for the purpose
of paying asbestos claims which were asserted before such
date of enactment, or by any Tier I defendant participant,
before any sunset of this Act, shall be null and void. This
subsection shall not void or affect in any way any
assignments of rights to insurance coverage other than to
asbestos claimants or to trusts, persons, or other entities
not part of an affiliated group as defined in section 201(1)
of this Act established or appointed for the purpose of
paying asbestos claims, or by Tier I defendant participants.
(3) Insurance claims preserved.--Notwithstanding any other
provision of this Act, this Act shall not alter, affect, or
impair any rights or obligations of any person with respect
to any insurance or reinsurance for amounts that any person
pays, has paid, or becomes legally obligated to pay in
respect of asbestos or other claims, including claims filed,
pursued, or revived under section 405(g), except to the
extent that--
[(A) such person pays or becomes legally obligated to pay
claims that are superseded by section 403;]
(A) such claims are preempted, barred, or superseded by
section 403;
(B) any such rights or obligations of such person with
respect to insurance or reinsurance are prohibited by
paragraph (1) or (2) of subsection (e); or
(C) the limits of insurance otherwise available to such
participant in respect of asbestos claims are deemed to be
eroded under subsection (a).
SEC. 405. ANNUAL REPORT OF THE ADMINISTRATOR AND SUNSET OF
THE ACT.
(a) In General.--The Administrator shall submit an annual
report to the Committee on the Judiciary of the Senate and
the Committee on the Judiciary of the House of
Representatives on the operation of the Asbestos Injury
Claims Resolution Fund within 6 months after the close of
each fiscal year.
(b) Contents of Report.--The annual report submitted under
this subsection shall include an analysis of--
(1) the claims experience of the program during the most
recent fiscal year, including--
(A) the number of claims made to the Office and a
description of the types of medical diagnoses and asbestos
exposures underlying those claims;
(B) the number of claims denied by the Office and a
description of the types of medical diagnoses and asbestos
exposures underlying those claims, and a general description
of the reasons for their denial;
(C) a summary of the eligibility determinations made by the
Office under section 114;
(D) a summary of the awards made from the Fund, including
the amount of the awards; and
(E) for each eligible condition, a statement of the
percentage of asbestos claimants who filed claims during the
prior calendar year and were determined to be eligible to
receive compensation under this Act, who have received the
compensation to which such claimants are entitled according
to section 131;
(2) the administrative performance of the program,
including--
(A) the performance of the program in meeting the time
limits prescribed by law and an analysis of the reasons for
any systemic delays;
(B) any backlogs of claims that may exist and an
explanation of the reasons for such backlogs;
(C) the costs to the Fund of administering the program; and
(D) any other significant factors bearing on the efficiency
of the program;
(3) the financial condition of the Fund, including--
(A) statements of the Fund's revenues, expenses, assets,
and liabilities;
(B) the identity of all participants, the funding
allocations of each participant, and the total amounts of all
payments to the Fund;
(C) a list of all financial hardship or inequity
adjustments applied for during the fiscal year, and the
adjustments that were made during the fiscal year;
(D) a statement of the investments of the Fund; and
(E) a statement of the borrowings of the Fund;
(4) the financial prospects of the Fund, including--
(A) an estimate of the number and types of claims, the
amount of awards, and the participant payment obligations for
the next fiscal year;
(B) an analysis of the financial condition of the Fund,
including an estimation of the Fund's ability to pay claims
for the subsequent 5 years in full as and when required, an
evaluation of the Fund's ability to retire its existing debt
and assume additional debt, and an evaluation of the Fund's
ability to satisfy other obligations under the program; and
(C) a report on any changes in projections made in earlier
annual reports or sunset analyses regarding the Fund's
ability to meet its financial obligations;
[[Page S821]]
(5) any recommendations from the Advisory Committee on
Asbestos Disease Compensation and the Medical Advisory
Committee of the Fund to improve the diagnostic, exposure,
and medical criteria so as to pay [only those claimants whose
injuries are caused by exposure to asbestos] those claimants
who suffer from injuries for which exposure to asbestos was a
substantial contributing factor;
(6) a summary of the results of audits conducted under
section 115; and
(7) a summary of prosecutions under section 1348 of title
18, United States Code (as added by this Act).
[(c) Claims Analysis.--If the Administrator concludes, on
the basis of the annual report submitted under this section,
that the Fund is compensating claims for injuries that are
not caused by exposure to asbestos and compensating such
claims may, currently or in the future, undermine the Fund's
ability to compensate persons with injuries that are caused
by exposure to asbestos, the Administrator shall include in
the report an analysis of the reasons for the situation, a
description of the range of reasonable alternatives for
responding to the situation, and a recommendation as to which
alternative best serves the interest of claimants and the
public. The report shall include a description of changes in
the diagnostic, exposure, or medical criteria of section 121
that the Administrator believes may be necessary to protect
the Fund from compensating claims not caused by exposure to
asbestos.]
(c) Claims Analysis and Verification of Unanticipated
Claims.--
(1) In general.--If the Administrator concludes, on the
basis of the annual report submitted under this section,
that--
(A) the average number of claims that qualify for
compensation under a claim level or designation exceeds 125
percent of the number of claims expected to qualify for
compensation under that claim level or designation in the
most recent Congressional Budget Office estimate of asbestos-
injury claims for any 3-year period, the Administrator shall
conduct a review of a statistically significant sample of
claims qualifying for compensation under the appropriate
claim level or designation; or
(B) the average number of claims that qualify for
compensation under a claim level or designation is less than
75 percent of the number of claims expected to qualify for
compensation under that claim level or designation in the
most recent Congressional Budget Office estimate of asbestos-
injury claims for any 3-year period, the Administrator shall
conduct a review of a statistically significant sample of
claims deemed ineligible for compensation under the
appropriate claim level or designation.
(2) Determinations.--The Administrator shall examine the
best available medical evidence and any recommendation made
under subsection (b)(5) in order to determine which 1 or more
of the following is true:
(A) Without a significant number of exceptions, all of the
claimants who qualified for compensation under the claim
level or designation suffer from an injury or disease for
which exposure to asbestos was a substantial contributing
factor.
(B) A significant number of claimants who qualified for
compensation under the claim level or designation do not
suffer from an injury or disease for which exposure to
asbestos was a substantial contributing factor.
(C) A significant number of claimants who were denied
compensation under the claim level of designation did suffer
from an injury or disease for which exposure to asbestos was
a substantial contributing factor.
(D) The Congressional Budget Office projections
underestimated or overestimated the actual number of persons
who suffer from an injury or disease for which exposure to
asbestos was a substantial contributing factor.
(3) Recommendations concerning claims criteria.--If the
Administrator determines that a significant number of the
claimants who qualified for compensation under the claim
level under review do not suffer from an injury or disease
for which exposure to asbestos was a substantial contributing
factor, or that a significant number of the claimants who
were denied compensation under the claim level under review
suffered from an injury or disease for which exposure to
asbestos was a substantial contributing factor, the
Administrator shall recommend to Congress, under subsection
(e), changes to the compensation criteria in order to ensure
that the Fund provides compensation for injury or disease for
which exposure to asbestos was a substantial contributing
factor, but does not provide compensation to claimants who do
not suffer from an injury or disease for which asbestos
exposure was a substantial contributing factor.
(d) Recommendations of Administrator and Advisory
Committee.--
(1) Referral.--If the Administrator recommends changes to
this Act under subsection (c), the recommendations and
accompanying analysis shall be referred to the Advisory
Committee on Asbestos Disease Compensation established under
section 102 (in this subsection referred to as the ``Advisory
Committee'').
(2) Advisory committee recommendations.--The Advisory
Committee shall hold expedited public hearings on the
alternatives and recommendations of the Administrator and
make its own recommendations for reform of the program under
titles I and II.
(3) Transmittal to congress.--Not later than 90 days after
receiving the recommendations of the Administrator, the
Advisory Committee shall transmit the recommendations of the
Administrator and the recommendations of the Advisory
Committee to the Committee on the Judiciary of the Senate and
the Committee on the Judiciary of the House of
Representatives.
[(d)](e) Shortfall Analysis.--
(1) In general.--
(A) Analysis.--If the Administrator concludes, on the basis
of the information contained in the annual report submitted
under this section, that the Fund may not be able to pay
claims as such claims become due at any time within the next
5 years, the Administrator shall include in the report an
analysis of the reasons for the situation, an estimation of
when the Fund will no longer be able to pay claims as such
claims become due, a description of the range of reasonable
alternatives for responding to the situation, and a
recommendation as to which alternative best serves the
interest of claimants and the public. The report may include
a description of changes in the diagnostic, exposure, or
medical criteria of section 121 that the Administrator
believes may be necessary to protect the Fund.
(B) Range of alternatives.--The range of alternatives under
subparagraph (A) may include--
(i) triggering the termination of this Act under subsection
(f) at any time after the date of enactment of this Act; and
(ii) reform of the program set forth in titles I and II of
this Act (including changes in the diagnostic, exposure, or
medical criteria, changes in the enforcement or application
of those criteria, changes in the timing of payments, changes
in contributions by defendant participants, insurer
participants (or both such participants), or changes in award
values).
(C) Insurer shortfall assessments.--Beginning in year 6 of
the life of the Fund, if the Administrator determines that a
shortfall in payment of the annual amounts required to be
paid by insurer participants under section 212(a)(3)(C) is
the substantial factor that would cause the Administrator to
recommend the termination of this Act under subsection (f),
then the Administrator may impose shortfall assessments on
insurer participants in addition to the payments imposed
under section 212, except that the Administrator shall not
impose such assessments if the additional amounts would not
be sufficient to permit the Administrator to avoid
recommending termination of this Act. During any given year,
the total of such shortfall assessments shall not exceed the
amount by which, during the prior year, total payments by
insurer participants fell short of the aggregate amounts
required to be paid under section 212(a)(3)(C). Shortfall
assessments shall be allocated among insurer participants
using the methodology adopted by the Asbestos Insurers
Commission under section 212(a)(1)(B).
(2) Considerations.--In formulating recommendations, the
Administrator shall take into account the reasons for any
shortfall, actual or projected, which may include--
(A) financial factors, including return on investments,
borrowing capacity, interest rates, ability to collect
contributions, and other relevant factors;
(B) the operation of the Fund generally, including
administration of the claims processing, the ability of the
Administrator to collect contributions from participants,
potential problems of fraud, the adequacy of the criteria to
rule out idiopathic mesothelioma, and inadequate flexibility
to extend the timing of payments;
(C) the appropriateness of the diagnostic, exposure, and
medical criteria, including the adequacy of the criteria to
rule out idiopathic mesothelioma;
(D) the actual incidence of asbestos-related diseases,
including mesothelioma, based on epidemiological studies and
other relevant data;
(E) compensation of diseases with alternative causes; and
(F) other factors that the Administrator considers
relevant.
(3) Recommendation of termination.--Any recommendation of
termination should include a plan for winding up the affairs
of the Fund (and the program generally) within a defined
period, including paying in full all claims resolved at the
time the report is prepared. Any plan under this paragraph
shall provide for priority in payment to the claimants with
the most serious illnesses.
(4) Resolved claims.--For purposes of this section, a claim
shall be deemed resolved when the Administrator has
determined the amount of the award due the claimant, and
either the claimant has waived judicial review or the time
for judicial review has expired.
[(e) Recommendations of Administrator and Commission.--
[(1) In general.--If the Administrator recommends changes
to this Act under subsection (c), the recommendations and
accompanying analysis shall be referred to a special
commission consisting of the Attorney General, the Secretary
of Labor, the Secretary of Health and Human Services, the
Secretary of the Treasury, and the Secretary of Commerce, or
their designees. The Commission shall hold expedited public
hearings on the Administrator's alternatives and
recommendations and then make its own recommendations for
reform of the program set forth in titles I and II of this
Act. Within 180 days after receiving the Administrator's
recommendations, the Commission shall transmit its own
recommendations to the Congress in the same manner as set
forth in subsection (a).
[(2) Referral.--If the Administrator recommends changes to,
or termination of, this Act under subsection (d), the
recommendations and accompanying analysis shall be referred
to the Commission. The Commission
[[Page S822]]
shall hold expedited public hearings on the Administrator's
alternatives and recommendations and then make its own
recommendations for reform of the program set forth in titles
I and II of this Act. Within 180 days after receiving the
Administrator's recommendations, the Commission shall
transmit its own recommendations to Congress in the same
manner as set forth in subsection (a).]
(f) Sunset of Act.--
(1) In general.--
(A) Termination.--Subject to paragraph (4), titles I
(except subtitle A) and II and sections 403 and 404(e)(2)
shall terminate as provided under paragraph (2), if the
Administrator--
(i) has begun the processing of claims; and
(ii) as part of the review conducted to prepare an annual
report under this section, determines that if any additional
claims are resolved, the Fund will not have sufficient
resources when needed to pay 100 percent of all resolved
claims while also meeting all other obligations of the Fund
under this Act, including the payment of--
(I) debt repayment obligations; and
(II) remaining obligations to the asbestos trust of a
debtor and the class action trust.
(B) Remaining obligations.--For purposes of subparagraph
(A)(ii), the remaining obligations to the asbestos trust of
the debtor and the class action trust shall be determined by
the Administrator by assuming that, instead of a lump-sum
payment, such trust had transferred its assets to the Fund on
an annual basis, taking into consideration relevant factors,
including the most recent projections made by the trust's
actuary before the date of enactment of this Act of the
amount and timing of future claim payments and administrative
and operating expenses.
(2) Effective date of termination.--A termination under
paragraph (1) shall take effect 180 days after the date of a
determination of the Administrator under paragraph (1) and
shall apply to all asbestos claims that have not been
resolved by the Fund as of the date of the determination.
(3) Resolved claims.--If a termination takes effect under
this subsection, all resolved claims shall be paid in full by
the Fund.
(4) Extinguished claims.--A claim that is extinguished
under the statute of limitations provisions in section 113(b)
is not revived at the time of sunset under this subsection.
(5) Continued funding.--If a termination takes effect under
this subsection, participants will still be required to make
payments as provided under subtitles A and B of title II. If
the full amount of payments required by title II is not
necessary for the Fund to pay claims that have been resolved
as of the date of termination, pay the Fund's debt and
obligations to the asbestos trusts and class action trust,
and support the Fund's continued operation as needed to pay
such claims, debt, and obligations, the Administrator may
reduce such payments. Any such reductions shall be allocated
among participants in approximately the same proportion as
the liability under subtitles A and B of title II.
(6) Sunset claims.--
(A) Definitions.--In this paragraph--
(i) the term ``sunset claims'' means claims filed with the
Fund, but not yet resolved, when this Act has terminated; and
(ii) the term ``sunset claimants'' means persons asserting
sunset claims.
(B) In general.--If a termination takes effect under this
subsection, the applicable statute of limitations for the
filing of sunset claims under subsection (g) shall be tolled
for any past or pending sunset claimants while such claimants
were pursuing claims filed under this Act. For those
claimants who decide to pursue a sunset claim in accordance
with subsection (g), the applicable statute of limitations
shall apply, except that claimants who filed a claim against
the Fund under this Act before the date of termination shall
have 2 years after the date of termination to file a sunset
claim in accordance with subsection (g).
(7) Asbestos trusts and class action trust.--On and after
the date of termination under this subsection, the trust
distribution program of any asbestos trust and the class
action trust shall be replaced with the medical criteria
requirements of section 121.
(8) Payment to asbestos trusts and class action trust.--The
amounts determined under paragraph (1)(B) for payment to the
asbestos trusts and the class action trust shall be
transferred to the respective asbestos trusts of the debtor
and the class action trust within 90 days.
(g) Nature of Claim After Sunset.--
(1) In general.--
(A) Relief.--On and after the date of termination under
subsection (f), any individual with an asbestos claim who has
not previously had a claim resolved by the Fund, may in a
civil action obtain relief in damages subject to the terms
and conditions under this subsection and paragraph (6) of
subsection (f).
(B) Resolved claims.--An individual who has had a claim
resolved by the Fund may not pursue a court action, except
that an individual who received an award for a nonmalignant
disease (Levels I through V) from the Fund may assert a claim
for a subsequent or progressive disease under this
subsection, unless the disease was diagnosed or the claimant
had discovered facts that would have led a reasonable person
to obtain such a diagnosis before the date on which the
previous claim against the Fund was disposed.
(C) Mesothelioma claim.--An individual who received an
award for a nonmalignant or malignant disease (except
mesothelioma) (Levels I through VIII) from the Fund may
assert a claim for mesothelioma under this subsection, unless
the mesothelioma was diagnosed or the claimant had discovered
facts that would have led a reasonable person to obtain such
a diagnosis before the date on which the nonmalignant or
other malignant claim was disposed.
(2) Exclusive remedy.--As of the effective date of a
termination of this Act under subsection (f), an action under
paragraph (1) shall be the exclusive remedy for any asbestos
claim that might otherwise exist under Federal, State, or
other law, regardless of whether such claim arose before or
after the date of enactment of this Act or of the termination
of this Act, except that claims against the Fund that have
been resolved before the date of the termination
determination under subsection (f) may be paid by the Fund.
(3) Venue.--
(A) In general.--Actions under paragraph (1) may be brought
in--
(i) any Federal district court;
(ii) any State court in the State where the claimant
resides; or
(iii) any State court in a State where the asbestos
exposure occurred.
(B) Defendants not found.--If any defendant cannot be found
in the State described in clause (ii) or (iii) of
subparagraph (A), the claim may be pursued only against that
defendant in the Federal district court or the State court
located within any State in which the defendant may be found.
(C) Determination of most appropriate forum.--If a person
alleges that the asbestos exposure occurred in more than one
county (or Federal district), the trial court shall determine
which State and county (or Federal district) is the most
appropriate forum for the claim. If the court determines that
another forum would be the most appropriate forum for a
claim, the court shall dismiss the claim. Any otherwise
applicable statute of limitations shall be tolled beginning
on the date the claim was filed and ending on the date the
claim is dismissed under this subparagraph.
(D) State venue requirements.--Nothing in this paragraph
shall preempt or supersede any State's law relating to venue
requirements within that State which are more restrictive.
(4) Class action trusts.--Notwithstanding any other
provision of this section--
(A) after the assets of any class action trust have been
transferred to the Fund in accordance with section 203(b)(5),
no asbestos claim may be maintained with respect to asbestos
liabilities arising from the operations of a person with
respect to whose liabilities for asbestos claims a class
action trust has been established, whether such claim names
the person or its successors or affiliates as defendants; and
(B) if a termination takes effect under subsection (f), the
exclusive remedy for all asbestos claims (including sunset
claims and claims first arising or first presented after
termination of the Fund) arising from such operations will be
a claim against the class action trust to which the
Administrator has transferred funds under subsection (f)(8)
to pay asbestos claims, if necessary in proportionally
reduced amounts.
(5) Expert witnesses.--If scientific, technical, or other
specialized knowledge will assist the trier of fact to
understand the evidence or to determine a fact in issue in an
action permitted under paragraph (1), a witness qualified as
an expert by knowledge, skill, experience, training, or
education, may testify thereto in the form of an opinion or
otherwise, if--
(A) the testimony is based upon sufficient facts or data;
(B) the testimony is the product of reliable principles and
methods; and
(C) the witness has applied the principles and methods
reliably to the facts of the case.
SEC. 406. RULES OF CONSTRUCTION RELATING TO LIABILITY OF THE
UNITED STATES GOVERNMENT.
(a) Causes of Actions.--Except as otherwise specifically
provided in this Act, nothing in this Act shall be construed
as creating a cause of action against the United States
Government, any entity established under this Act, or any
officer or employee of the United States Government or such
entity.
(b) Funding Liability.--Nothing in this Act shall be
construed to--
(1) create any obligation of funding from the United States
Government, [other than the funding for personnel and support
as provided under this Act; or] including any borrowing
authorized under section 221(b)(2); or
(2) obligate the United States Government to pay any award
or part of an award, if amounts in the Fund are inadequate.
SEC. 407. RULES OF CONSTRUCTION.
(a) Libby, Montana Claimants.--Nothing in this Act shall
preclude the formation of a fund for the payment of eligible
medical expenses related to treating asbestos-related disease
for current and former residents of Libby, Montana. The
payment of any such medical expenses shall not be collateral
source compensation as defined under section 134(a).
(b) Healthcare From Provider of Choice.--Nothing in this
Act shall be construed to preclude any eligible claimant from
receiving healthcare from the provider of their choice.
[[Page S823]]
SEC. 408. VIOLATIONS OF ENVIRONMENTAL HEALTH AND SAFETY
REQUIREMENTS.
(a) Asbestos in Commerce.--If the Administrator receives
information concerning conduct occurring after the date of
enactment of this Act that may have been a violation of
standards issued by the Environmental Protection Agency under
the Toxic Substances Control Act (15 U.S.C. 2601 et seq.),
relating to the manufacture, importation, processing,
disposal, and distribution in commerce of asbestos-containing
products, the Administrator shall refer the matter in writing
within 30 days after receiving that information to the
Administrator of the Environmental Protection Agency and the
United States attorney for possible civil or criminal
penalties, including those under section 17 of the Toxic
Substances Control Act (15 U.S.C. 2616), and to the
appropriate State authority with jurisdiction to investigate
asbestos matters.
(b) Asbestos as Air Pollutant.--If the Administrator
receives information concerning conduct occurring after the
date of enactment of this Act that may have been a violation
of standards issued by the Environmental Protection Agency
under the Clean Air Act (42 U.S.C. 7401 et seq.), relating to
asbestos as a hazardous air pollutant, the Administrator
shall refer the matter in writing within 30 days after
receiving that information to the Administrator of the
Environmental Protection Agency and the United States
attorney for possible criminal and civil penalties, including
those under section 113 of the Clean Air Act (42 U.S.C.
7413), and to the appropriate State authority with
jurisdiction to investigate asbestos matters.
(c) Occupational Exposure.--If the Administrator receives
information concerning conduct occurring after the date of
enactment of this Act that may have been a violation of
standards issued by the Occupational Safety and Health
Administration under the Occupational Safety and Health Act
of 1970 (29 U.S.C. 651 et seq.), relating to occupational
exposure to asbestos, the Administrator shall refer the
matter in writing within 30 days after receiving that
information and refer the matter to the Secretary of Labor or
the appropriate State agency with authority to enforce
occupational safety and health standards, for investigation
for possible civil or criminal penalties under section 17 of
the Occupational Safety and Health Act of 1970 (29 U.S.C.
666).
(d) Enhanced Criminal Penalties for Willful Violations of
Occupational Standards for Asbestos.--Section 17(e) of the
Occupational Safety and Health Act of 1970 (29 U.S.C. 656(e))
is amended--
(1) by striking ``Any'' and inserting ``(1) Except as
provided in paragraph (2), any''; and
(2) by adding at the end the following:
``(2) Any employer who willfully violates any standard
issued under section 6 with respect to the control of
occupational exposure to asbestos, shall upon conviction be
punished by a fine in accordance with section 3571 of title
18, United States Code, or by imprisonment for not more than
5 years, or both, except that if the conviction is for a
violation committed after a first conviction of such person,
punishment shall be by a fine in accordance with section 3571
of title 18, United States Code, or by imprisonment for not
more than 10 years, or both.''.
(e) Contributions to the Asbestos Trust Fund by EPA and
OSHA Asbestos Violators.--
(1) In general.--The Administrator shall assess employers
or other individuals determined to have violated asbestos
statutes, standards, or regulations administered by the
Department of Labor, the Environmental Protection Agency, and
their State counterparts, for contributions to the Asbestos
Injury Claims Resolution Fund (in this section referred to as
the ``Fund'').
(2) Identification of violators.--Each year, the
Administrator shall--
(A) in consultation with the Assistant Secretary of Labor
for Occupational Safety and Health, identify all employers
that, during the previous year, were subject to final orders
finding that they violated standards issued by the
Occupational Safety and Health Administration for control of
occupational exposure to asbestos (29 C.F.R. 1910.1001,
1915.1001, and 1926.1101) or the equivalent asbestos
standards issued by any State under section 18 of the
Occupational Safety and Health Act (29 U.S.C. 668); and
(B) in consultation with the Administrator of the
Environmental Protection Agency, identify all employers or
other individuals who, during the previous year, were subject
to final orders finding that they violated asbestos
regulations administered by the Environmental Protection
Agency (including the National Emissions Standard for
Asbestos established under the Clean Air Act (42 U.S.C. 7401
et seq.), the asbestos worker protection standards
established under part 763 of title 40, Code of Federal
Regulations, and the regulations banning asbestos promulgated
under section 501 of this Act), or equivalent State asbestos
regulations.
(3) Assessment for contribution.--The Administrator shall
assess each such identified employer or other individual for
a contribution to the Fund for that year in an amount equal
to--
(A) 2 times the amount of total penalties assessed for the
first violation of occupational health and environmental
statutes, standards, or regulations;
(B) 4 times the amount of total penalties for a second
violation of such statutes, standards, or regulations; and
(C) 6 times the amount of total penalties for any
violations thereafter.
(4) Liability.--Any assessment under this subsection shall
be considered a liability under this Act.
(5) Payments.--Each such employer or other individual
assessed for a contribution to the Fund under this subsection
shall make the required contribution to the Fund within 90
days of the date of receipt of notice from the Administrator
requiring payment.
(6) Enforcement.--The Administrator is authorized to bring
a civil action under section 223(c) against any employer or
other individual who fails to make timely payment of
contributions assessed under this section.
(f) Review of Federal Sentencing Guidelines for
Environmental Crimes Related to Asbestos.--Under section 994
of title 28, United States Code, and in accordance with this
section, the United States Sentencing Commission shall review
and amend, as appropriate, the United States Sentencing
Guidelines and related policy statements to ensure that--
(1) appropriate changes are made within the guidelines to
reflect any statutory amendments that have occurred since the
time that the current guideline was promulgated;
(2) the base offense level, adjustments, and specific
offense characteristics contained in section 2Q1.2 of the
United States Sentencing Guidelines (relating to mishandling
of hazardous or toxic substances or pesticides;
recordkeeping, tampering, and falsification; and unlawfully
transporting hazardous materials in commerce) are increased
as appropriate to ensure that future asbestos-related
offenses reflect the seriousness of the offense, the harm to
the community, the need for ongoing reform, and the highly
regulated nature of asbestos;
(3) the base offense level, adjustments, and specific
offense characteristics are sufficient to deter and punish
future activity and are adequate in cases in which the
relevant offense conduct--
(A) involves asbestos as a hazardous or toxic substance;
and
(B) occurs after the date of enactment of this Act;
(4) the adjustments and specific offense characteristics
contained in section 2B1.1 of the United States Sentencing
Guidelines related to fraud, deceit, and false statements,
adequately take into account that asbestos was involved in
the offense, and the possibility of death or serious bodily
harm as a result;
(5) the guidelines that apply to organizations in chapter 8
of the United States Sentencing Guidelines are sufficient to
deter and punish organizational criminal misconduct that
involves the use, handling, purchase, sale, disposal, or
storage of asbestos; and
(6) the guidelines that apply to organizations in chapter 8
of the United States Sentencing Guidelines are sufficient to
deter and punish organizational criminal misconduct that
involves fraud, deceit, or false statements against the
Office of Asbestos Disease Compensation.
SEC. 409. NONDISCRIMINATION OF HEALTH INSURANCE.
(a) Denial, Termination, or Alteration of Health
Coverage.--No health insurer offering a health plan may deny
or terminate coverage, or in any way alter the terms of
coverage, of any claimant or the beneficiary of a claimant,
on account of the participation of the claimant or
beneficiary in a medical monitoring program under this Act,
or as a result of any information discovered as a result of
such medical monitoring.
(b) Definitions.--In this section:
(1) Health insurer.--The term ``health insurer'' means--
(A) an insurance company, healthcare service contractor,
fraternal benefit organization, insurance agent, third-party
administrator, insurance support organization, or other
person subject to regulation under the laws related to health
insurance of any State;
(B) a managed care organization; or
(C) an employee welfare benefit plan regulated under the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1001 et seq.).
(2) Health plan.--The term ``health plan'' means--
(A) a group health plan (as such term is defined in section
607 of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1167)), and a multiple employer welfare
arrangement (as defined in section 3(4) of such Act) that
provides health insurance coverage; or
(B) any contractual arrangement for the provision of a
payment for healthcare, including any health insurance
arrangement or any arrangement consisting of a hospital or
medical expense incurred policy or certificate, hospital or
medical service plan contract, or health maintenance
organizing subscriber contract.
(c) Conforming Amendments.--
(1) ERISA.--Section 702(a)(1) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1182(a)(1)), is
amended by adding at the end the following:
``(I) Participation in a medical monitoring program under
the Fairness in Asbestos Injury Resolution Act of 2005.''.
(2) Public service health act.--Section 2702(a)(1) of the
Public Health Service Act (42 U.S.C. 300gg-1(a)(1)) is
amended by adding at the end the following:
[[Page S824]]
``(I) Participation in a medical monitoring program under
the Fairness in Asbestos Injury Resolution Act of 2005.''.
(3) Internal revenue code of 1986.--Section 9802(a)(1) of
the Internal Revenue Code of 1986 is amended by adding at the
end the following:
``(I) Participation in a medical monitoring program under
the Fairness in Asbestos Injury Resolution Act of 2005.''.
TITLE V--ASBESTOS BAN
SEC. 501. PROHIBITION ON ASBESTOS CONTAINING PRODUCTS.
(a) In General.--Title II of the Toxic Substances Control
Act (15 U.S.C. 2641 et seq.) is amended--
(1) by inserting before section 201 (15 U.S.C. 2641) the
following:
``Subtitle A--General Provisions'';
and
(2) by adding at the end the following:
``Subtitle B--Ban of Asbestos Containing Products
``SEC. 221. BAN OF ASBESTOS CONTAINING PRODUCTS.
``(a) Definitions.--In this chapter:
``(1) Administrator.--The term `Administrator' means the
Administrator of the Environmental Protection Agency.
``(2) Asbestos.--The term `asbestos' includes--
``(A) chrysotile;
``(B) amosite;
``(C) crocidolite;
``(D) tremolite asbestos;
``(E) winchite asbestos;
``(F) richterite asbestos;
``(G) anthophyllite asbestos;
``(H) actinolite asbestos;
``(I) [amphibole asbestos] asbestiform amphibole minerals;
and
``(J) any of the minerals listed under subparagraphs (A)
through (I) that has been chemically treated or altered, and
any asbestiform variety, type, or component thereof.
``(3) Asbestos containing product.--The term `asbestos
containing product' means any product (including any part) to
which asbestos is deliberately or knowingly added or used
because the specific properties of asbestos are necessary for
product use or function. Under no circumstances shall the
term `asbestos containing product' be construed to include
products that contain de minimus levels of naturally
occurring asbestos as defined by the Administrator not later
than 1 year after the date of enactment of this chapter.
``(4) Distribute in commerce.--The term `distribute in
commerce'--
``(A) has the meaning given the term in section 3 of the
Toxic Substances Control Act (15 U.S.C. 2602); and
``(B) shall not include--
``(i) an action taken with respect to an asbestos
containing product in connection with the end use of the
asbestos containing product by a person that is an end user,
or an action taken by a person who purchases or receives a
product, directly or indirectly, from an end user; or
``(ii) distribution of an asbestos containing product by a
person solely for the purpose of disposal of the asbestos
containing product in compliance with applicable Federal,
State, and local requirements.
``(b) In General.--Subject to subsection (c), the
Administrator shall promulgate--
``(1) not later than 1 year after the date of enactment of
this chapter, proposed regulations that--
``(A) prohibit persons from manufacturing, processing, or
distributing in commerce asbestos containing products; and
``(B) provide for implementation of subsections (c) and
(d); and
``(2) not later than 2 years after the date of enactment of
this chapter, final regulations that, effective 60 days after
the date of promulgation, prohibit persons from
manufacturing, processing, or distributing in commerce
asbestos containing products.
``(c) Exemptions.--
``(1) In general.--Any person may petition the
Administrator for, and the Administrator may grant, an
exemption from the requirements of subsection (b), if the
Administrator determines that--
``(A) the exemption would not result in an unreasonable
risk of injury to public health or the environment; and
``(B) the person has made good faith efforts to develop,
but has been unable to develop, a substance, or identify a
mineral that does not present an unreasonable risk of injury
to public health or the environment and may be substituted
for an asbestos containing product.
``(2) Terms and conditions.[--An] Except for an exception
authorized under paragraph (3)(A)(i), an exemption granted
under this subsection shall be in effect for such period (not
to exceed 5 years) and subject to such terms and conditions
as the Administrator may prescribe.
``(3) Governmental use.--
[``(A) In general.--The Administrator of the Environmental
Protection Agency shall provide an exemption from the
requirements of subsection (b), without review or limit on
duration, if such exemption for an asbestos containing
product is--
[``(i) sought by the Secretary of Defense and the Secretary
certifies, and provides a copy of that certification to
Congress, that--
[``(I) use of the asbestos containing product is necessary
to the critical functions of the Department;
[``(II) no reasonable alternatives to the asbestos
containing product exist for the intended purpose; and
[``(III) use of the asbestos containing product will not
result in an unreasonable risk to health or the environment;
or
[``(ii) sought by the Administrator of the National
Aeronautics and Space Administration and the Administrator of
the National Aeronautics and Space Administration certifies,
and provides a copy of that certification to Congress, that--
]
``(A) In general.--
``(i) Department of defense.--Nothing in this section or in
the regulations promulgated by the Administrator under
subsection (b) shall prohibit or limit the manufacture,
processing, or distribution in commerce of asbestos
containing products by or for the Department of Defense or
the use of asbestos containing products by or for the
Department of Defense if the Secretary of Defense certifies
(or recertifies within 10 years of a prior certification),
and provides a copy of the certification to Congress, that--
``(I) use of asbestos containing product is necessary to
the critical functions of the Department, which includes the
use of the asbestos containing product in any weaponry,
equipment, aircraft, vehicles, or other classes or categories
of property which are owned or operated by the Armed Forces
of the United States (including the Coast Guard) or by the
National Guard of any State and which are uniquely military
in nature;
``(II) no reasonably available and equivalent alternatives
to the asbestos containing product exist for the intended
purpose; and
``(III) use of the asbestos containing product will not
result in a known unreasonable risk to health or the
environment.
``(ii) National aeronautics and space administration.--The
Administrator of the Environmental Protection Agency shall
provide an exemption from the requirements of subsection (b),
without review or limit on duration, if such exemption for an
asbestos containing product is sought by the Administrator of
the National Aeronautics and Space Administration and the
Administrator of the National Aeronautics and Space
Administration certifies, and provides a copy of that
certification to Congress, that--
``(I) the asbestos containing product is necessary to the
critical functions of the National Aeronautics and Space
Administration;
``(II) no reasonable alternatives to the asbestos
containing product exist for the intended purpose; and
``(III) the use of the asbestos containing product will not
result in an unreasonable risk to health or the environment.
``(B) Administrative procedure act.--Any certification
required under subparagraph (A) shall not be subject to
chapter 5 of title 5, United States Code (commonly referred
to as the `Administrative Procedure Act').
``(4) Specific exemptions.--The following are exempted:
``(A) Asbestos diaphragms for use in the manufacture of
chlor-alkali and the products and derivative therefrom.
``(B) Roofing cements, coatings, and mastics utilizing
asbestos that is totally encapsulated with asphalt, subject
to a determination by the Administrator of the Environmental
Protection Agency under paragraph (5).
``(5) Environmental protection agency review.--
``(A) Review in 18 months.--Not later than 18 months after
the date of enactment of this chapter, the Administrator of
the Environmental Protection Agency shall complete a review
of the exemption for roofing cements, coatings, and mastics
utilizing asbestos that are totally encapsulated with asphalt
to determine whether--
``(i) the exemption would result in an unreasonable risk of
injury to public health or the environment; and
``(ii) there are reasonable, commercial alternatives to the
roofing cements, coatings, and mastics utilizing asbestos
that is totally encapsulated with asphalt.
``(B) Revocation of exemption.--Upon completion of the
review, the Administrator of the Environmental Protection
Agency shall have the authority to revoke the exemption for
the products exempted under paragraph (4)(B), if warranted.
``(d) Disposal.--
``(1) In general.--Except as provided in paragraph (2), not
later than 3 years after the date of enactment of this
chapter, each person that possesses an asbestos containing
product that is subject to the prohibition established under
this section shall dispose of the asbestos containing
product, by a means that is in compliance with applicable
Federal, State, and local requirements.
``(2) Exemption.--Nothing in paragraph (1)--
``(A) applies to an asbestos containing product that--
``(i) is no longer in the stream of commerce; or
``(ii) is in the possession of an end user or a person who
purchases or receives an asbestos containing product directly
or indirectly from an end user; or
``(B) requires that an asbestos containing product
described in subparagraph (A) be removed or replaced.''.
(b) Technical and Conforming Amendments.--The table of
contents in section 1 of the Toxic Substances Control Act (15
U.S.C. prec. 2601) is amended--
(1) by inserting before the item relating to section 201
the following:
``Subtitle A--General Provisions'';
and
(2) by adding at the end of the items relating to title II
the following:
[[Page S825]]
``Subtitle B--Ban of Asbestos Containing Products
``Sec. 221. Ban of asbestos containing products.''.
SEC. 502. NATURALLY OCCURRING ASBESTOS.
(a) Study.--
(1) In general.--Not later than 12 months after the date of
enactment of this Act, the Administrator of the Environmental
Protection Agency shall--
(A) conduct a study to assess the risks of exposure to
naturally occurring asbestos, including the appropriateness
of the existing risk assessment values for asbestos and
methods of assessing exposure; and
(B) submit a report that contains a detailed statement of
the findings and conclusions of such study to--
(i) the majority and minority leaders of the Senate;
(ii) the Speaker and the minority leader of the House of
Representatives; and
(iii) the relevant committees of jurisdiction of the Senate
and House of Representatives, including--
(I) the Environment and Public Works Committee of the
Senate;
(II) the Appropriations Committee of the Senate;
(III) the Judiciary Committee of the Senate;
(IV) the Energy and Commerce Committee of the House of
Representatives;
(V) the Judiciary Committee of the House of
Representatives; and
(VI) the Appropriations Committee of the House of
Representatives.
(2) Development requirements.--
(A) In general.--Not later than 18 months after the date of
enactment of this Act, the Administrator of the Environmental
Protection Agency, in consultation with appropriate Federal
and State agencies and other interested parties after
appropriate notice, shall establish dust management
guidelines, and model State regulations that States can
choose to adopt, for commercial and residential development,
and road construction in areas where naturally occurring
asbestos is present and considered a risk. Such dust
management guidelines may at a minimum incorporate provisions
consistent with the relevant California Code of Regulation
(17 C.C.R. 93105-06).
(B) Dust management guidelines.--Guidelines under this
paragraph shall include--
(i) site management practices to minimize the disturbance
of naturally occurring asbestos and contain asbestos
mobilized from the source at the development site;
(ii) air and soil monitoring programs to assess asbestos
exposure levels at the development site and to determine
whether asbestos is migrating from the site; and
(iii) appropriate disposal options for asbestos-containing
materials to be removed from the site during development.
(b) Testing Protocols.--
(1) In general.--Not later than 18 months after the date of
enactment of this Act, the Administrator of the Environmental
Protection Agency, in consultation with appropriate State
agencies, shall establish comprehensive protocols for testing
for the presence of naturally occurring asbestos.
(2) Protocols.--The protocols under this subsection shall
address both ambient air monitoring and activity-based
personal sampling and include--
(A) suggested sampling devices and guidelines to address
the issues of methods comparability, sampler operation,
performance specifications, and quality control and quality
assurance;
(B) a national laboratory and air sampling accreditation
program for all methods of analyses of air and soil for
naturally occurring asbestos;
(C) recommended laboratory analytical procedures, including
fiber types, fiber lengths, and fiber aspect ratios; and
(D) protocols for collecting and analyzing aggregate and
soil samples for asbestos content, including proper and
consistent sample preparation practices suited to the
activity likely to occur on the soils of the study area.
(c) Existing Buildings and Areas.--Not later than 1 year
after the date of enactment of this Act, the Administrator of
the Environmental Protection Agency shall issue public
education materials, recommended best management practices
and recommended remedial measures for areas containing
naturally occurring asbestos including existing--
(1) schools and parks; and
(2) commercial and residential development.
(d) Mapping.--The Secretary of the Interior shall--
(1) acquire infrared mapping data for naturally occurring
asbestos, prioritizing California counties experiencing rapid
population growth;
(2) process that data into map images; and
(3) collaborate with the California Geological Survey and
any other appropriate State agencies in producing final maps
of asbestos zones.
(e) Research Grants.--The Director of the National
Institutes of Health shall administer 1 or more research
grants to qualified entities for studies that focus on better
understanding the health risks of exposure to naturally
occurring asbestos. Grants under this subsection shall be
awarded through a competitive peer-reviewed, merit-based
process.
(f) Task Force Participation.--Representatives of Region IX
of the United States Environmental Protection Agency, and the
Agency for Toxic Substances and Disease Registry of the
United States Department of Health and Human Services shall
participate in any task force convened by the State of
California to evaluate policies and adopt guidelines for the
mitigation of risks associated with naturally occurring
asbestos.
(g) Matching Grants.-- The Administrator of the
Environmental Protection Agency is authorized to award 50
percent matching Federal grants to States and municipalities.
Not later than 4 months after the date of enactment of this
Act, the Administrator of the Environmental Protection Agency
shall establish criteria to award such grants--
(1) for monitoring and remediation of naturally occurring
asbestos--
(A) at schools, parks, and other public areas; and
(B) in serpentine aggregate roads generating significant
public exposure; and
(2) for development, implementation, and enforcement of
State and local dust management regulations concerning
naturally occurring asbestos, provided that after the
Administrator has issued model State regulations under
subsection (a)(2), such State and local regulations shall be
at least as protective as the model regulations to be
eligible for the matching grants.
(h) Availability of Funds.--An amount of $40,000,000 from
the Fund shall be made available to carry out the
requirements of this section, including up to $9,000,000 for
the Secretary of the Interior to carry out subsection (d), up
to $4,000,000 for the Director of the National Institutes of
Health to carry out subsection (e), and the remainder for the
Administrator of the Environmental Protection Agency, at
least $15,000,000 of which shall be used for the matching
grants under subsection (g).
(i) Construction.--
(1) Guidelines and protocols.--The guidelines and protocols
issued by the Administrator of the Environmental Protection
Agency under the specific authorities in subsections (a),
(b), and (c) shall be construed as nonbinding best practices
unless adopted as a mandatory requirement by a State or local
government. Notwithstanding the preceding sentence,
accreditation for testing will not be granted except in
accordance with the guidelines issued under subsection
(b)(2)(B).
(2) Federal causes of action.--This section shall not be
construed as creating any new Federal cause of action for
civil, criminal, or punitive damages.
(3) Federal claims.--This section shall not be construed as
creating any new Federal claim for injunctive or declaratory
relief against a State, local, or private party.
(4) States and localities.-- Nothing in this section shall
limit the authority of States or localities concerning
naturally occurring asbestos.
Mr. KENNEDY. Mr. President, I understand there is no time limit on
speeches. Am I correct?
The PRESIDING OFFICER. The Senator is correct.
Mr. KENNEDY. Many Senators on both sides of the aisle find the
concept of a trust fund to compensate the victims of asbestos-related
diseases appealing. I have consistently said that I would support a
properly designed and adequately funded trust fund bill that would
fairly compensate all the victims of asbestos-induced disease in a
timely way. The problem is that S. 852 does not meet that standard. It
is not properly designed and it is not adequately funded. Many
seriously ill victims of asbestos disease are completely excluded from
compensation under the fund. And the legislation does not even provide
adequate revenue to ensure that all the victims who are eligible for
compensation under the terms of the trust fund will actually receive
what the legislation promises them. These are fundamental flaws that
cannot be corrected by a few last minute amendments. They go to the
heart of the bill.
The problem is that powerful corporate interests responsible for the
asbestos epidemic have fought throughout this process to escape full
accountability for the harm they have inflicted. As a result, the focus
has shifted from what these companies should pay victims to what they
are willing to pay them. That is preventing the Senate from enacting
trust fund legislation that will truly help the workers who have been
seriously injured by this industrial plague.
This legislation was constructed backwards. The first decision made
was that the size of the trust fund could not exceed $140 billion over
30 years. Why? Because that was all the corporations whose reckless
conduct created the asbestos problem were willing to pay. The Asbestos
Study Group, the chief lobbyists for this legislation, began this
process by promising ``an evergreen fund'' that would provide as much
money as necessary over time to fairly compensate the victims of
asbestos disease. But they soon reneged on that commitment. Instead,
these companies are now insisting on an absolute cap on their
liability--no matter how many victims are suffering from asbestos-
induced disease or how serious their illnesses. Asbestos diseases take
years, sometimes decades, to develop after the exposure to asbestos
fibers. Thus, no one can say for sure how many victims there will be.
The companies claim that they need financial certainty to plan for the
future. What about the millions of victims of asbestos exposure who
live every day under
[[Page S826]]
the cloud of asbestos disease? What about the ability of these workers
and their families to plan for their future?
Each year, more than 10,000 of them die from lung cancer and other
diseases caused by asbestos. Each year, hundreds of thousands of them
suffer from lung conditions which make breathing so difficult that they
cannot function at all. Even more become unemployable due to their
medical condition. And, because of the long latency period of these
diseases, all of them live with fear of a premature death due to
asbestos-induced disease. These are the real victims. Aren't they
entitled to the certainty of knowing that, should the worst happen,
they and their families will be fairly compensated? All S. 852 offers
them is an inadequately funded trust fund that most experts believe
will be insolvent within a few years.
The real crisis which confronts us is not an ``asbestos litigation
crisis,'' it is an asbestos-induced disease crisis. All too often, the
tragedy these workers and their families are enduring becomes lost in a
complex debate about the economic impact of asbestos litigation. We
cannot allow that to happen. The litigation did not create these costs.
Exposure to asbestos created them. They are the costs of medical care,
the lost wages of incapacitated workers, and the cost of providing for
the families of workers who died years before their time. Those costs
are real. No legislative proposal can make them disappear. All
legislation can do is shift those costs from one party to another.
Unfortunately, S. 852 would shift more of the financial burden onto the
backs of injured workers. That is unacceptable.
Senators Specter and Leahy have devoted an enormous amount of time
and effort to this asbestos trust fund legislation. They did not set
the arbitrary $140 billion ceiling. The Republican leadership made
clear that the trust fund could not exceed that amount regardless of
the legitimate needs of asbestos victims. The sponsors were left with
the unenviable task of deciding which worthy claims to exclude. As a
result, the bill before us contains fundamental flaws, which make it
both unfair and unworkable. It does not provide a reliable guarantee of
just compensation to the enormous number of workers who are suffering
from asbestos-induced disease.
The argument that there are serious inadequacies in the way asbestos
cases are adjudicated today does not mean that any legislation is
better than the current system. Our first obligation is to do no harm.
We should not be supporting legislation that excludes many seriously
ill victims from receiving compensation and that fails to provide a
guarantee of adequate funding to make sure that these injured workers
covered by the trust fund will actually receive what the bill promises
them. This bill will do harm to these asbestos victims.
The list of serious flaws in S. 852 is, unfortunately, a long one. I
will focus my remarks on several of the most egregious.
Experts tell us that the asbestos trust created by this legislation
is seriously underfunded. The funding plan in this bill relies on very
substantial borrowing in the early years as the only way to pay the
flood of claims. The result will be huge debt service costs over the
life of the trust that could reduce the $140 billion intended to pay
claims by as much as 40 percent. The amount remaining would be far too
little to pay the claims of all of those who are entitled to
compensation under the terms of the bill.
In addition, there is a strong constitutional argument that the
existing bankruptcy trusts cannot be forced to turn over all their
assets, which will place $7.6 billion of the projected funding in
jeopardy. Many companies are also likely to challenge their obligation
to finance the asbestos trust. It is not at all clear how much money
will actually be available to pay eligible victims what the legislation
promises they will receive.
There is likely to be a serious shortfall in the early years, when
nearly 300,000 pending cases will be transferred to the trust for
payment. Studies show the trust will not have the resources to pay
those claims in a timely manner. Payments to critically ill people may
be delayed for years.
One way to reduce the enormous financial burden on the fund in the
early years would be to leave many of those cases in the tort system,
especially cases which were close to resolution. That would be fair to
the parties in those cases and it would greatly improve the financial
viability of the fund. Unfortunately, that proposal has been repeatedly
rejected by the sponsors of the bill. As a result, there will be a
serious mismatch between the number of claims the trust fund will face
when its doors open and the payments coming into the fund. That will
force major borrowing in the first 5 years. The debt service resulting
from that borrowing will financially cripple the trust.
In its August report, CBO recognizes the seriousness of this debt-
service problem, explaining:
Because expenses would exceed revenues in many of the early
years of the fund's operations, the Administrator would need
to borrow funds to make up the shortfall. The interest cost
of this borrowing would add significantly to the long-term
costs faced by the fund and contributes to the possibility
that the fund might become insolvent.
In a response to inquiries from Judiciary Committee members last
week, CBO issued an even more dire warning about the likelihood of
insolvency:
There is a significant likelihood that the fund's revenues
would fall short of the amount needed to pay valid claims, as
well as debt-service and administrative costs. There is also
some likelihood that the fund's revenues would be sufficient
to meet those needs. The final outcome cannot be predicted
with great certainty. Without a substantial increase in the
resources available to the fund, there is no way to guarantee
that the fund will not either revert to the court system or
require additional funding.
That statement should trouble every Senator on both sides of the
aisle. There is ``a significant likelihood that the fund's revenues
would fall short.'' While we may disagree on other issues regarding
compensation for asbestos victims, each of us knows that it would be
disastrous--for victims and businesses alike--to create a trust fund
that cannot meet its financial commitment to victims and is destined
for insolvency. None of us want to see that result. We cannot in good
conscience ignore the warnings from the Congressional Budget Office and
from other experts.
In addition to the concerns CBO has identified, there are other major
problems with S. 852 related to the projections of pending and future
claims that could push the trust fund even further out of balance.
For example, there has been a significant increase in the number of
mesothelioma cases in recent years. The only known cause of
mesothelioma is asbestos exposure. This new information suggests that
the CBO cost estimate may understate the cost of the mesothelioma
claims that the trust fund will incur by more than $15 billion. This is
by no means the only instance where there is strong evidence to suggest
that the number of eligible claimants will substantially exceed CBO
estimates.
If S. 852 is enacted, the U.S. Government will be making a commitment
to compensate hundreds of thousands of seriously ill asbestos victims,
but will not have ensured that adequate dollars are available to honor
its commitment. That will precipitate a genuine asbestos crisis, and
this Congress will bear the responsibility for it. Since the trust fund
will be borrowing extensively from the U.S. Treasury in its first few
years of operation; if it does become insolvent, there will be a direct
impact on American taxpayers.
The legislation before us would close the courthouse doors to
asbestos victims on the day it passes, long before the trust fund will
be able to pay their claims. Their cases will be stayed immediately.
Seriously ill workers will be forced into a legal limbo for up to 2
years. Their need for compensation to cover medical expenses and basic
family necessities will remain, but they will have nowhere to turn for
relief.
Under the legislation, even exigent health claims currently pending
in the courts will be automatically stayed for 9 months as of the date
of enactment. An exigent health claim is one in which the victim has
been diagnosed ``as being terminally ill from an asbestos-related
illness and having a life expectancy of less than one year.''
By definition, these cases all involve people who have less than a
year to live due to mesothelioma or some other disease caused by
asbestos exposure. Their cases would all be stayed
[[Page S827]]
for 9 months. Nine months is an eternity for someone with less than a
year to live. Many of them will die without receiving either their day
in court or compensation from the trust fund.
The stay language is written so broadly that it would even stop all
forward movement of a case in the court system. A trial about to begin
would be halted. An appellate ruling about to be issued would be
barred. Even the deposition of a dying witness could not be taken to
preserve his testimony. The stay would deprive victims of their last
chance at justice. I cannot believe that the authors of this bill
intended such a harsh result, but that is what the legislation does.
The bill does contain language allowing an ``offer of judgment'' to
be made during the period of the stay in the hope of producing a
settlement. However, this provision is unlikely to resolve many cases
because it requires the agreement of the defendants. There is no
incentive for defendants to agree to a settlement when the case has
been stayed. Those who have tried cases know that it is only the
imminence of judicial action which produces a settlement in most cases.
Delay is the defendant's best ally; and under this bill, the case is at
least delayed for 9 months and may never be allowed to resume if the
fund becomes operational. If, however, these exigent cases were not
stayed, and judicial proceedings could continue, there would be far
more likelihood of cases settling under the offer of judgment process.
I strongly believe that, at a minimum, all exigent cases should be
exempted from the automatic stay in the legislation. Victims with less
than a year to live certainly should be allowed to continue their cases
in court uninterrupted until the trust fund became operational. Their
ability to recover compensation in the court should not be halted until
the trust fund is open for business and they are able to receive
compensation from that fund. It is grossly unfair to leave these dying
victims in a legal limbo. For them, the old adage is especially true--
justice delayed is justice denied.
Under the legislation, defendants would receive a credit against what
they must contribute to the trust fund for whatever payments they make
to these dying victims; so they would not be ``paying twice,'' as some
have claimed.
Allowing the exigent cases to go forward in the courts without
interruption is a matter of simple fairness. Staying the cases of
victims who have less than a year to live is bureaucratic insensitivity
at its worst. Most of these victims will not live to see the doors of
the trust fund open.
We should not deprive them of their last chance--their only chance--
to receive some measure of justice before asbestos-induced disease
silences them. They should be allowed to receive compensation in their
final months to ease their suffering. They should be allowed to die
knowing that their families are financially provided for. S. 852 in its
current form takes that last chance away from them.
I intend to offer an amendment to allow these severely ill victims to
have their day in court.
The way the legislation is written, victims will lose out at the back
end of the process as well, should the trust fund run out of money
after several years of operation.
If the trust fund does become insolvent, a very real possibility,
workers will not have an automatic right to immediately return to the
court system. The process outlined in the current bill could take
years. Workers could end up trapped in the trust with reduced benefits
and long delays in receiving their payments. There needs to be a clear,
objective trigger--inability of the trust to pay a certain percentage
of claims within a set period of time--that will automatically allow
victims to pursue their claims in court if the trust runs out of money.
The Judiciary Committee's 2003 legislation contained such a provision,
but this bill does not. We cannot allow seriously injured workers with
valid claims who are not paid in a timely manner by the trust to be
denied their day in court. That would be a shameful injustice.
The asbestos trust is being presented as an alternative source of
compensation for victims suffering from asbestos-induced disease. If
that alternative runs out of money and can no longer compensate those
victims in a full and timely manner, their right to seek compensation
through the judicial system should be immediately restored with no
strings attached. No principle is more basic. Yet this bill violates
that principle.
I am particularly upset by the way lung cancer victims are treated in
this bill. Under the medical criteria adopted by the Judiciary
Committee overwhelmingly 2 years ago, all lung cancer victims who had
at least 15 years of weighted exposure to asbestos were eligible to
receive compensation from the fund. However, that was changed in S.
852. Under this bill, lung cancer victims who have had very substantial
exposure to asbestos over long periods of time are denied any
compensation unless they can show asbestos scarring on their lungs. The
committee heard expert medical testimony that prolonged asbestos
exposure dramatically increases the probability that a person will get
lung cancer even if they do not have scarring on their lungs. Deleting
this category will deny compensation to more than 40,000 victims
suffering with asbestos-related lung cancers. Under the legislation as
now drafted, these victims are losing their right to go to court, but
receiving nothing from the fund. How can any of us support such an
unconscionable provision?
Since we began considering asbestos legislation, no aspect has
concerned me more than the treatment of lung cancer victims. My top
priority has been to make sure that these severely ill workers receive
just and fair compensation.
And I have not been alone. A number of other Members have spoken out
about the importance of adequately providing for lung cancer victims
who have been exposed to substantial amounts of asbestos over long
periods of time.
Now we find that these victims, many of whom will have their lives
cut short because of asbestos-induced disease, will not receive one
penny in compensation from the trust fund. They are losing their right
to go to court, but being denied any right to compensation under the
fund. They are, in essence, being told to suffer in a legally imposed
silence with no recourse whatsoever.
One of the arguments we hear most frequently in favor of creating an
asbestos trust fund is that in the current system, too much money goes
to people who are not really sick and too little goes to those who are
seriously ill. Well, lung cancer victims who have years of exposure to
asbestos are the ones who are seriously ill. They are the ones this
legislation is supposed to be helping. Yet they are being completely
excluded.
The committee heard extensive testimony from distinguished medical
experts--Dr. Laura Welsh and Dr. Philip Landrigan--that prolonged
exposure to asbestos can cause lung cancer even if the victim does not
also have markers of nonmalignant asbestos disease. They cited numerous
medical authorities supporting their position. They even described
treating lung cancer victims whose disease was clearly caused by
asbestos but who had neither pleural thickening or asbestosis.
In a situation where people are undeniably severely ill and
undeniably had 15 or more years of weighted exposure to asbestos, it is
wrong to completely exclude them from compensation under the trust
fund. Some of the proponents of S. 852 have attempted to justify
excluding them by claiming that smoking probably caused their lung
cancers. But, the evidence refutes this contention.
First, even those lung cancer victims with 15 or more weighted years
of exposure to asbestos who had never smoked were removed from
eligibility for compensation under the trust fund. So this is about
more than just the relationship between asbestos and smoking.
Second, regarding the smoking issue, Dr. Landrigan testified that
smokers who have substantial exposure to asbestos have 55 times the
background risk of developing lung cancer, while smokers who were not
exposed to asbestos have 10 times the background risk of developing
lung cancer. Clearly, the asbestos exposure makes a huge difference.
There is a powerful synergistic effect between asbestos and tobacco
in the
[[Page S828]]
causation of lung cancer. Both are substantial contributing factors to
the disease. The smoker with substantial asbestos exposure should
receive less compensation from the trust fund than the nonsmoker with
lung cancer. That principle appears throughout the bill. But smoking is
not a reason to exclude the smoker from all compensation.
Without prolonged exposure to asbestos, the smoker would have been
far less likely to contract lung cancer. It is a gross injustice to
completely exclude these severely ill workers.
Any person who was exposed to asbestos for 15 or more weighted years
and now has lung cancer should be eligible for compensation from the
trust fund. It would not be automatic. Their cases would be reviewed
individually by a panel of physicians to determine whether asbestos was
a ``substantial contributing factor'' to their lung cancer. These
40,000 victims of asbestos should not be arbitrarily excluded from
receiving compensation. They were included in the original legislation,
it was agreed to by medical experts for both business and labor, and
that provision should be restored to the bill. I will be proposing an
amendment to rectify this serious injustice.
This bill also tampers with the agreed-upon medical criteria
carefully negotiated between representatives of business and labor by
raising the standard of proof for each disease category. The language
in S. 852 requires the workers to prove that asbestos was ``a
substantial contributing factor'' to their disease, instead of just ``a
contributing factor.'' This is a major increase in the burden workers
must overcome to receive compensation. It is significantly higher than
most states currently require in a court of law. Rather than having to
show that asbestos exposure contributed to their illness, they will now
have to address the relative impact of asbestos and other potential
factors. This change is a serious step in the wrong direction, raising
the bar even higher on injured workers.
Another major shortcoming of this legislation is its failure to
compensate the residents of areas that have experienced large-scale
asbestos contamination. S. 852 simply pretends that this problem does
not exist. It fails to compensate the victims of all asbestos-induced
diseases, other than mesothelioma, whose exposure was not directly tied
to their work. There is very substantial scientific evidence showing
that the men, women and children who lived in the vicinity of asbestos-
contaminated sites, such mining operations and processing plants, can
and do contract asbestos-induced disease.
The reason that this legislation needs a special provision to
compensate the residents of Libby, MT, is because it does not
compensate victims of community contamination generally. The residents
of Libby are certainly entitled to compensation, but so are the
residents who lived near the many processing plants from Massachusetts
to California that received the lethal ore from the Libby mine. The
deadly dust from Libby, MT, was spread across America. W.R. Grace
shipped almost 10 billion pounds of Libby ore to its processing
facilities between the 1960s and the mid 1990s. One of the places it
was shipped was to the town of Easthampton, MA, where the operations of
an expanding plant spread the asbestos to the surrounding environment,
into the air and onto the soil. I intend to discuss this problem in
great detail as the debate moves forward.
I raise it now as a dramatic example of one of the major injustices
caused by the arbitrary exclusion of a large number of asbestos victims
from compensation under the trust fund. Nor is the problem of community
contamination limited to the sites receiving ore from Libby. Community
asbestos contamination can result from many different sources. For
example, medical experts believe it may result from exposure to
asbestos after the collapse of the World Trade Center. Because of the
long latency period, we often do not learn about community asbestos
contamination until long after it occurs. Certainly these victims of
asbestos are entitled to fair treatment as well. They should not be
arbitrarily excluded from compensation as if their suffering is somehow
less worthy of recognition than the suffering of other asbestos
victims. Yet that is what S. 852 does.
This is a bill that shifts more of the financial burden of asbestos-
induced disease to injured workers by unfairly and arbitrarily limiting
the liability of defendants. It does not establish a fair and reliable
system that will compensate all those who are seriously ill due to
asbestos. It lacks a dependable funding stream which can ensure that
all who are entitled to compensation actually receive full and timely
payment. These are very basic shortcomings.
We cannot allow what justice requires to be limited by what the
wrongdoers are willing to pay. I intend to vote no and I urge my
colleagues to do the same.
Mr. President, I yield the floor.
The PRESIDING OFFICER (Mr. Graham). The Senator from Utah.
Mr. HATCH. Mr. President, I rise today to speak in favor of S. 852,
the bipartisan Fairness in Asbestos Injury Resolution Act of 2005. I
commend the majority leader and Chairman Specter and Senator Leahy for
seizing the bull by the horns and proceeding with this vitally
important litigation. And it is bipartisan legislation.
Make no mistake about this--this bill is not perfect. There are some
things in the act that I wish were different, but that is the nature of
the legislative process. It is about compromise and negotiation.
In a moment, I will speak to specific aspects of this bill. But
before I do, I would like to take a moment to respond to some of the
allegations that my colleagues made on the floor yesterday.
Some of them spoke of corruption. They spoke of undue influence
wielded by lobbyists. And they spoke of fairness.
The truth is, this legislation is badly needed. Personal injury
lawyers--some personal injury lawyers--are profiting at the expense of
asbestos victims and manufacturers alike.
This bill is about fairness, justice, and certainty. It has become a
bill that has tried to do away with fraud because this situation is
fraught with fraud--fraud on American businesses, fraud on American
consumers, and, more importantly, fraud on asbestos victims.
Let me tell you what this bill does. This bill provides real
compensation to real victims with real injuries. This bill stops a
rampaging personal injury trial bar. This bill fixes a broken legal
system that benefits personal injury lawyers at the expense of asbestos
victims. And this bill provides certainty to everyone involved.
Some of my colleagues on the other side have called S. 852 special
interest legislation. If helping sick people and preventing fraud
constitutes special interest action, then maybe they could get away
with that charge. But I am very proud--and I think anybody who supports
this bill would be proud--to support legislation that assists those
special interests.
I ask my colleagues: Do you know who opposes this bill? It is the
personal injury lawyers involved. They are a small cadre of the total
number of American Trial Lawyers Association members. These trial
lawyers have fought this legislation the same way the old gunslingers
fought the law in the Wild West. Some of my colleagues have spoken of
bragging lobbyists. The only people I have ever heard bragging about
the scams that are going on are some of these personal injury lawyers.
Do you know when I heard them bragging? Last Congress, when we failed
to invoke cloture on this bill's predecessor. It was not lobbyists or
manufacturers or asbestos victims who were having some celebratory
steak and champagne dinners in 2004; it was the personal injury
lawyers. Why would they celebrate? They were celebrating because they
successfully preserved their 40-percent payout on massive class action
lawsuits and the exorbitant transaction costs that raise the amounts
taken from victims to almost 60 percent, with only about 40 percent
given to the victims. They were celebrating because their meal ticket
was not taken away from them. Not this time.
Before I continue, I wish to point out not all personal injury
lawyers are bad, certainly not all trial lawyers. I was a trial lawyer
in my younger days. I know most of them are good people with good
intentions. However, as they say, it only takes one bad apple to spoil
the whole bushel.
[[Page S829]]
We face an asbestos litigation crisis of unparalleled magnitude. Real
asbestos victims with horrific injuries are receiving pennies on the
dollar, while people who are not sick, or at least their lawyers, are
receiving millions of dollars. American companies, businesses both
large and small, many of which never produced or used asbestos fibers,
are being forced into bankruptcy by fraudulent lawsuits. These
bankruptcies hurt all Americans. Pensions are destroyed, jobs are lost,
and all because our current legal system is vulnerable to unscrupulous
trial lawyers. We have had the Supreme Court ask the Congress three
times to weigh in on this and stop this mess from continuing. That is
what we are trying to do with this bill.
According to the RAND Institute for Civil Justice, the asbestos
crisis has been called the worst occupational health disaster in U.S.
history. The personal injury bar has compounded that disaster by filing
countless meritless claims that deprive the truly injured of their just
and deserved compensation. The RAND Institute has found that
approximately 730,000 people have filed asbestos claims through 2002.
Despite the fact that asbestos claims should decrease each year due to
OSHA and, to some extent, EPA actions in the 1970s and 1980s which
severely curtailed national asbestos exposure, we have seen a
significant increase in the number of claims, particularly nonmalignant
claims, during the last 15 years. It is a gravy train for some of these
lawyers. That does not dismiss the fact that there are people who are
hurt by this, many of whom are not going to get a dime because a large
number of their companies are bankrupt.
The large number of claims--expected to burgeon to the million-plus
mark in the not-so-distant future--has resulted in 77 bankruptcies, the
loss of some 60,000 jobs, or workers' privileges, and the depletion of
countless pension programs. Moreover, due to the nature and number of
these claims, compensation for the truly ill is often arbitrary and
inequitable. According to the RAND Institute study, only 42 cents of
every dollar spent on asbestos litigation actually goes to the asbestos
victims; 31 cents goes to defense costs, and 27 cents goes to
plaintiffs' attorneys. The situation becomes all the more deplorable
when one factors in the ghastly specter of fraud. One study has shown
that 41 percent of audited claims of alleged asbestosis or pleural
disease were found to have either no disease or a less severe disease
than alleged by the personal injury experts. That is simply
unacceptable. We are trying to solve that problem.
At present there are more than 300,000 asbestos-related claims
pending before this Nation's courts. Company after company has plunged
into bankruptcy with disastrous results. Some victims have gone without
compensation and many have nowhere to turn. Thousands have lost their
jobs. The only winners in most cases are the personal injury lawyers.
Asbestos trial lawyers have pulled in over $20 billion in attorney's
fees. One actuarial firm estimates that personal injury lawyers are
expected to filch another $40 billion before they run out of victims. I
don't have any problem with lawyers getting contingent fees for
legitimate cases. I don't have any problem with that. But the fact is,
many of these cases are not legitimate. It is time to make a choice.
That choice is between private jets for trial lawyers and meaningful
compensation for asbestos victims.
Before I move on to the operational aspects of this legislation, I
wish to take a moment to talk about the victims of asbestos exposure.
Unfortunately, veterans comprise a large percentage of this group. I
wish to make a plea on their behalf. This may be the last chance to
help the men and women who served this country with such distinction
and who, as a result of that service, were exposed to asbestos fibers.
Time is rapidly running out for this group and many, if not most, of
the companies they could turn to are now bankrupt, mainly because of
these lawsuits. Even if they are not bankrupt, lawsuits take so much
time and the verdicts are so uncertain that many will be cheated out of
their just compensation. Even if some of these fine men and women
manage to obtain a verdict against a company with sufficient assets to
make good on the obligation, about 58 percent of the award would be
consumed not by the victim but by trial lawyers. That is plain wrong.
Let me tell you how this bill works. S. 852 will compensate
legitimate asbestos victims in a timely fashion on a no-fault basis.
They are not going to have to go to court to prove their case.
Claimants must demonstrate they meet certain medical criteria--and
those criteria were agreed on in a bipartisan agreement--but once that
threshold showing has been made, thereby assuring that only the truly
sick are compensated, the claimants will receive timely compensation
based upon the nature of the injury.
Some of my colleagues asserted that all claimants under this bill
obtain a one-size-fits-all settlement if they meet the medical criteria
requirements. As Chairman Specter has pointed out, that is plain wrong.
There are nine tiers and corresponding awards under this bill, and it
allows for further compensation if the condition worsens, meaning if a
claimant had a level 2 injury that later developed into a level 8
injury or more serious injury, that individual can obtain compensation
up to the level 8 or more serious tier. That makes sense to me.
It is worth pointing out that in addition to providing a no-fault and
timely compensation system, the FAIR Act provides certainty to asbestos
victims by taking away the whims of juries and the avarice of some of
these personal injury lawyers. Under this bill, if you are sick, you
will be compensated. Furthermore, this bill promotes economic stability
and preserves jobs by taking the uncertain burden of direct and
residual asbestos liability away from manufacturers, insurers, and
others, and levying a measurable, known, and beneficial sum that will
help those truly in need. In other words, they will have to pay, but it
will be done on a reasonable, decent basis, so that those who are
suffering will get paid in the end, where many of them will not under
the current system.
For the victims, it provides meaningful compensation in a relatively
short order. It is no-fault compensation for them. For the
manufacturers and other defendant entities, it removes the parasitic
personal injury bar from the picture and assures that asbestos dollars
reach asbestos victims.
Finally, this bill contains an asbestos ban that will help lower
asbestos exposure beyond what OSHA has achieved.
I was surprised to hear some opponents of this bill say S. 852 is not
ready, that any action on this measure would be premature. Frankly, I
am somewhat shocked by this. I will not go into the full history of the
bill. In fact, I will limit my discussion of its development to the
107th Congress and beyond. But I must note that efforts in this area
predate my efforts and the efforts of then-Chairman Leahy in the 107th
Congress.
Now with tremendous effort, Chairman Specter and Ranking Member Leahy
have worked this through in a way that has greatly improved what we
were trying to do back then. The Judiciary Committee has held at least
a half dozen hearings on asbestos issues, and we have held several
exhaustive markups over the years. In addition, I note that Chief Judge
Emeritus of the Third Circuit, Edward R. Becker, and now-Chairman
Specter held at least 36 meetings with stakeholders to reach the
compromise before us. This was a monumental effort by Senator Specter
and Former Chief Judge Edward R. Becker. I just saw Chief Judge Becker
over in the Dirksen Building. I know the sacrifices he has made to try
and help us on this matter. And to have this bill called special
interest legislation, when we have had people such as Judge Becker work
out these details by meeting with all concerned, including the trial
lawyers, including businesses and individuals and groups and so forth,
I don't know when anybody has made such an effort as both Chairman
Specter and Judge Becker.
We are currently on the third asbestos bill since the beginning of
the 108th Congress. We have moved from S. 1125, which was the subject
of a 4-day markup over 2 months, to S. 2290, to S. 852. Finally, after
a 6-day markup, which also spanned 2 full months, the Judiciary
Committee reported the current bill with a bipartisan 13-to-5 vote.
That doesn't sound like special interest legislation to me. And it
isn't.
[[Page S830]]
With that in mind, it is hard to understand how opponents of this
bill can claim with a straight face that this bill is not ready for
consideration by the full Senate. That is ridiculous. Can it be
amended? Surely. That is why we debate. Can we change aspects of it?
Surely. That is why we debate. That is why we have this debate on the
floor, if we are ever allowed to debate it.
This brings me to some of the outstanding criticisms of this
legislation. First, we have heard it hurts small businesses. Since it
is unclear to me what the deleterious effects on small business may be,
I find it difficult to even spend time trying to refute those types of
baseless charges. I would ask my colleagues who hold this belief to
expound upon the allegation so we can better understand their concerns.
However, before they do so, I ask my colleagues to look at the small
business exception contained within S. 852, specifically section 204(b)
of this act. Small businesses do not have to contribute to the fund
while at the same time they receive its benefits. I have a hard time
understanding why this is bad for small businesses. After all, they do
get something for nothing.
The next major objection focuses on the removal of pending cases from
court. Such action is unfair, they say. Well, I am puzzled by this
assertion as well. First, cases that have proceeded to the evidentiary
stage of the trial are not touched by this act. Secondly, the
underlying premise of this bill focuses on two things: one, the
uncertainty of jury trials and the ability of defendants to pay; two,
the parasitical impact some of these voracious trial lawyers have on
the process. This bill will provide certainty to the process, ensure
those who have been injured will receive compensation, and make sure
compensation so awarded goes to the victims and not to the trial bar in
such dimensions as we have had so far. In fact, the trial bar will be
entitled to fees under this bill; they just won't be as high because
the proof is a no-fault proof. It is like rolling off a log. I ask my
colleagues, how is that unfair?
The next assertion focuses on the amount of the trust fund. It is not
enough to say it is not enough. That is what they say. To that I say,
the CBO seems to think the amount falls within the estimated range of
claims and, further, that this amount was agreed upon by Majority
Leader Frist and then-Minority Leader Daschle after extensive
negotiation. Overall, it would seem some Members on the other side of
the aisle want to prevent us from proceeding to this bill. While I am
not surprised by obstructive tactics--we have seen them before; I saw a
good deal of them during the last Congress and I know enough to be able
to say with confidence that what looks like a duck and quacks like a
duck is, in fact, a duck--it is obstruction. Why can't we debate this
bill up and down? Why don't we get into it? If we have legitimate
objections, I am sure the distinguished chairman and ranking member
will consider them. That is why we debate these things. I am
nonetheless disturbed by the tactics of some on the other side, given
the tremendous importance of this legislation to our country.
As I say, the Supreme Court no less than three times asked us to do
this--or at least to find some solution to this massive litigation
crisis that is clogging our courts, hurting the country, and costing
everybody an arm and a leg, without doing the justice to victims that
this bill will do.
It is troubling when we consider that without the FAIR Act, more and
more Americans are certain to lose their jobs, and more and more
victims of asbestos exposure will go without compensation. This all
goes to show that personal injury lawyers are a powerful force, and
some on the other side of the aisle are willing to hear the voice of
the personal injury bar over the voices of hard-working Americans who
want to keep their jobs and pensions. Don't tell me about special
interest legislation. We all know what special interest is driving the
opponents of this bill.
The fact is that this bill continues to create a fair and efficient
alternative compensation system to resolve the claims for injury caused
by asbestos exposure. The fund is capitalized through private
contributions from defendants and insurers, not the Government, and
compensates victims under medical criteria that we reached on a
bipartisan basis. I thought once we got the medical criteria, this bill
should go forward. We had a lot of people on both sides saying they
want to support it. Now we are here, and this is the chance to do it.
If you don't like it, file amendments. I am sure the distinguished
chairman and ranking member will give consideration to the amendments.
The bill brings uniformity and rationality to a broken system so that
resources are more effectively directed toward those who are truly
sick.
I know the last asbestos bill contained no fewer than 53 compromise
measures demanded by the Democrats last year. Moreover, I know this
bill contains many more. Chairman Specter and Ranking Minority Member
Leahy are still working with the labor unions and others to improve the
bill. This bill did not sneak up on anybody. It is not the instrument
of a wayward group of influential lobbyists. The bipartisan FAIR Act is
the product of years of negotiation and hard work--bipartisan people
who are interested in solving problems, not creating them.
Not only does this bill guarantee fair compensation to victims, it
guarantees faster and more certain compensation at that. We anticipate
that claimants will not have to endure years of discovery battles and
endless litigation before they get paid. Currently, whether some
victims get paid depends on the solvency of businesses. But under the
FAIR Act, these victims will no longer have to go without payment. It
is time to end the current system of jackpot justice, where only some
win and many lose.
Let me mention one group--the mesothelioma victims. Most of them have
no chance at being fairly compensated because they work for companies
that are now bankrupt. This bill takes care of them and helps them with
their problem. Given that this bill is a clear net monetary gain for
legitimate victims and provides payments faster and with more
certainty, I am at a loss as to why anybody would object to this bill
or object to a full and fair debate and a vote up or down. Quite
frankly, the only entities that stands to lose under this bill are a
handful of personal injury lawyers who have guzzled more than $20
billion of the costs incurred on this issue as of the end of last year.
If the improved FAIR Act is passed, they will not be able to leverage
unimpaired claims to squeeze a projected $40 billion more for
themselves from remotely connected companies by abusing a broken
system.
I support compensating attorneys for the value of their work, no
question. Honest lawyers deserve to be paid. But when the lawyers get
rich while diverting valuable resources away from sick victims and to
people who are not victims, people who don't deserve compensation,
which is going on here, something is wrong with the system. But you
don't need me to tell you this; the Supreme Court, think tanks, and
other nonpartisan commentators have been saying it for years.
We have a serious problem on our hands which demands this body's full
attention. I applaud our majority leader, the chairman of the Judiciary
Committee, Senator Specter, and his ranking member, Senator Leahy, for
bringing this bill to the floor. The time to act is now. I would like
to see us go forward in a legitimate, honest way to try to solve these
problems. If people on either side have objections to the bill or have
a reason to try to change it, they can bring amendments forward, and
let's battle it out. The chairman has been very open to accepting good
ideas. He has consistently done that throughout this process. I don't
think anybody can find fault with our chairman for the way he has
operated on this bill and how hard he has worked.
We have studied this asbestos problem at length, for decades. We have
held numerous hearings, considered legislative proposals, and even
underwent several marathon markups in the Judiciary Committee over the
years. To the extent there are issues that remain unresolved, we can
openly debate them on the floor of the Senate.
The time has come to stop talking about doing something and take
decisive action. Every day that passes is a day we withhold meaningful
recovery to truly sick victims. Every day that passes is a day in which
hard-working Americans at companies that had little
[[Page S831]]
or nothing to do with asbestos face decreased pensions and an uncertain
employment future. Every day that passes is a day that we deny
consideration of a comprehensive solution to one of the most plaguing
civil justice issues of our time.
This is step one. If we can get a bill out of the Senate, this would
move forward so fast. The House would have to come up with its
legislation, and we would then go to conference. I have no doubt,
having watched the chairman and ranking member, that they would be
working in good faith to try to accommodate and please all legitimate
points of view on these very profound and difficult issues. I
compliment them one more time. These folks deserve that we debate this
bill fully, that we have a vote up or down on the bill in the end, and
that we go through this process and hopefully continue to improve the
legislation so that we can do justice in our society.
I yield the floor.
The PRESIDING OFFICER. The Senator from Illinois is recognized.
Mr. DURBIN. Mr. President, first, let me acknowledge the obvious. A
lot of work has gone into this bill. Senator Specter, Senator Leahy,
and members of the Judiciary Committee, including Senator Hatch, have
spent hours, days, weeks, and months preparing this bill. It is a bill
that should have taken a long time because it is a bill that says
something very basic and fundamental and, in many ways, revolutionary:
It says we can no longer trust the court system in America. It says the
court system is inadequate in America to compensate victims. That is a
charge not made lightly, I am sure, by the sponsor of this legislation.
It is one we should not take lightly on the floor of the Senate because
we have established over the course of this Nation's history some
things which are generally accepted by most Americans.
It is true that Congress and legislatures write the law. The
President and executive branch enforce it. And when it comes to making
decisions of how that law applies to our lives, we trust the courts.
The decision has been made by those who are pushing this bill that we
can no longer trust the courts. The decision has been made that we have
to replace our court system with something else. If we are going to
step away from a time-honored institution and tradition in America to
create an alternative, it is a daunting task.
Those of us who have been critical of this legislation are going to
hold the sponsors to some very fundamental questions. The first: Can
you provide the same level of fairness and compensation in your new
system that the courts of America provide today? The answer can be
found in responses from victims groups around the country. The victims
of asbestos have been writing to Members of Congress saying: Don't pass
this legislation. The compensation you will give to the victims and
their families is inadequate and unpredictable. Those families have
come to see me. They have heartbreaking stories--stories of young men
and young women whose lives were snuffed out because of exposure to
asbestos. In not a single case have I ever met somebody who said: I
guess I knew I had it coming to me; I decided to expose myself to
asbestos. I never ran into a person like that or heard a story like
that.
The victims of asbestos are as surprised by the diagnosis as they can
be. It is no surprise to us when we consider this insidious disease.
These flaky fibers which are breathed into the lungs can sit there like
a timebomb for decades. Do you recall the movie actor named Steve
McQueen? He died from mesothelioma. He was exposed to asbestos at some
point in his life, which later exploded into a fatal lung disease.
Earlier this week on the floor, I talked about my former colleague,
Bruce Vento, of Minnesota, a Congressman from St. Paul. He was a
picture of health and was in the gym every morning, and then he didn't
feel well. He went to the doctor, and after a chest x-ray, they said:
You were somehow in your life exposed to asbestos. Now you have
mesothelioma and just months to live.
Those stories are repeated over and over again about men who worked
in asbestos mines who got off scot-free and never developed a problem,
but their wives at home, who shook out their work clothes before
putting them into the washer, breathed in the fibers and contracted
asbestosis and mesothelioma and died. It is insidious.
I could spend more than an hour telling you that, since 1934, the
companies which have been creating asbestos products have known how
dangerous this product is. I could, and maybe I will at some point, go
through the extensive evidence of deception and cover-up by these
companies so that their employees did not understand the serious
dangers they were exposed to in the workplace, and the dangers that
many of them took home in their work clothes. These victims and their
families come to visit me--lovely young women from the Chicago suburbs
with beautiful children, and they show pictures of families whose
husbands were lost in their early forties to mesothelioma.
This bill says that compensation for victims of asbestos is capped at
$1.1 million. If you happen to be a mesothelioma victim, that's only
$1.1 million for medical bills, lost wages, and to raise children. That
is a figure which might have sounded pretty large to start with, but it
begins to be very modest when you look at individual victims and their
families. That is why the victims have come to us and said: Don't
replace the court system in America with this approach. It is not fair
to the victims.
Others have come to us as well and said that the way you put the
money into the trust fund, which is supposed to pay the victims, is a
mystery. We have repeatedly asked the chairman of the Judiciary
Committee who is the sponsor of the legislation, to provide us with the
documentation. Please show us how $140 billion will adequately
compensate the victims of asbestos exposure over the 50-year life span
of this bill. We are still waiting for the information. So we are going
to replace the court system with a trust fund. We are going to say that
$140 billion will be enough for 50 years, without any evidence of how
that number was arrived at or whether that number will really meet the
needs of the victims. I will speak in a few moments about those experts
who have analyzed this bill and found that the numbers underlying the
assumptions are totally wrong.
Another group that comes to us to discuss this bill are those being
asked to pay into the trust fund that will be created by this bill. The
argument has been made on the floor, thank goodness, that the taxpayers
won't have to pay into this. These will be businesses and insurance
companies which will put money in the trust fund so they don't have to
pay out asbestos claims any longer in court. Well, it turns out that
some businesses will do quite well. Some of them are going to receive a
windfall in terms of what they have put into this fund as opposed to
what they might pay in court.
U.S. Gypsum is a company that has a large legal exposure for
asbestos. Because of corporate reports they made public in the last
couple of weeks, we now know that, in order for the company to pay out
all the existing claims filed against USG by victims of asbestos, they
estimate it will cost them in the range of $4 billion. This chart is an
excerpt of an article from BusinessWeek dated January 27, 2006, which
says, USG is willing to cough up $4 billion to settle victims' claims.
That is $4 billion of asbestos exposure for this one corporation. So if
they didn't pay that amount in court settlements, and instead came into
this bill, what would they pay into this trust fund? That figure is
$900 million, according to USG's own corporate report.
This is a windfall. They have to be smiling and praying this bill is
going to pass because if it does, the company is off the hook for over
$3 billion of legal liability that they even admit to in court. And who
will make up the difference? Who is going to make up the $3.1 billion
this company should be paying the victims? Other companies. Companies
that may never have had many lawsuits filed against them because of
asbestos, and companies that have never paid out a penny in terms of
asbestos claims, even if they were sued. These smaller companies will
be expected to pay millions and millions of dollars into this trust
fund when larger companies are walking away with a windfall.
So we asked again to the sponsor of this legislation: If you cannot
tell us how you arrived at the figure of $140
[[Page S832]]
billion, can you at least give us the names of the companies and how
much they are expected to contribute into this trust fund? And we are
still waiting.
The chairman spoke yesterday about how he was going to subpoena these
records. I hope they will be produced during the course of this debate.
I hope we will have a list of all the businesses with----
Mr. SPECTER. Mr. President, will the Senator from Illinois yield for
a question?
Mr. DURBIN. I will be happy to yield.
Mr. SPECTER. Is the Senator from Illinois aware of the fact that the
Judiciary Committee, on which he serves, issued a subpoena and has the
names of the companies that are going to be contributing to the trust
fund.
Mr. DURBIN. I know the chairman made that statement yesterday, and I
am hoping he will share that information.
Mr. SPECTER. Mr. President, I am advised by staff, since I posed the
question, in a note to the effect that Senator Durbin's staff did come
to look at the list. Is the Senator from Illinois aware of that?
Mr. DURBIN. May I respond to the chairman by stating that I
understand this information on the list has been characterized as
confidential information before the committee and cannot be shared
publicly.
Mr. SPECTER. The pending question--and I will be glad to answer his--
is, Does the Senator from Illinois know that his staff came to look at
the list?
Mr. DURBIN. I am aware of the fact they reviewed it, but I am also
aware of the fact this has not been made public as part of this
conversation and part of this record.
Mr. SPECTER. Mr. President, with all due respect, the issue isn't
whether it has been made public, the issue is whether it is in
existence, and the issue beyond being in existence is whether it is
available to Members who have to vote on the bill. So when the Senator
from Illinois asserts that you don't know who is making contributions,
it is simply not so.
The issue of confidentiality is true. It has been raised by the
companies because they are concerned that if it is disclosed how much
they have contributed or are proposing to contribute that they may be
targets for more litigation.
I don't wish to interrupt the Senator from Illinois further. I simply
wish to make the point that he is wrong when he says we don't know who
is going to contribute the money, and his own staffer has taken a look
at the list.
Mr. DURBIN. Let me respond, if I may. Why is this cloaked in secrecy?
Why is this a secret conversation? How can we have confidence that the
$140 billion figure has any validity? How can we have confidence that
the businesses that will be called on are going to be able to
contribute to this fund if this is cloaked in secrecy and
confidentiality? Most of these lawsuits are open, public record. It is
hard for me to imagine that a business is going to be sued because
someone has identified them as a potential contributor to this trust
fund.
Nevertheless, if we are expected to replace the court system in
America with this new trust fund system, how can we do it with any
confidence if all the information is not on the table? Why the secrecy?
What are we concealing? What we are concealing, frankly, is the most
controversial elements of this bill: a question of whether $140 billion
will actually pay the victims--and I doubt that it will--a question of
whether companies are going to be asked to pay into this trust fund who
shouldn't be asked to pay into the trust fund and, subsequently, may be
forced into bankruptcy, closing their doors because of it. These are
questions of great moment. To say a staff person can have access to
secret files in an office hardly gives any comfort in the midst of a
public debate about an issue of this magnitude.
Mr. SPECTER. Mr. President, will the Senator from Illinois yield
further?
Mr. DURBIN. I will yield for a question.
Mr. SPECTER. Is the Senator from Illinois aware, putting it in the
form of a question, that he has made a shift in positions, first
asserting that we don't know who is going to contribute the money, then
finding out that we do know who is going to contribute the money, that,
in fact, his staffer has looked at that list, and he is now raising a
different issue as to what is the need for secrecy?
That is not the point about which I raised the question. When he
talks about litigation, there are many confidential matters in
litigation which remain confidential on a showing of cause. So my
question to the Senator from Illinois is, does he realize that he has
shifted his position from objecting to the status where nobody knows
who is contributing, changing to why the reason for the secrecy?
Mr. DURBIN. I say to the Senator from Pennsylvania----
Mr. SPECTER. As a couple of experienced trial lawyers and debaters,
or at least he is an experienced trial lawyer and debater.
Mr. DURBIN. As the Senator from Pennsylvania is as well. In response,
unless and until we put this information out to be reviewed in a
comprehensive and honest way, I don't believe we can stand before the
American people and say this is a good replacement for the courts of
America.
Let me tell the Senator what happened. A member of my staff was
invited to the Senator's office to view the secret list. He was warned
ahead of time not to take any notes, not to make any copies, and not to
disclose the nature and substance of the secret list because they were
treated as committee confidential. My staffer went to view the list and
reported to me the information wasn't very helpful in answering the
most basic questions about the companies, their liability, and, of
course, the impact on each company and whether they can survive the
contributions to the trust fund.
Under the committee confidential rule the chairman has imposed on all
staff members reviewing this list, I am not sure I can say much more
about this secret list on the floor, but I will say this is a highly
unusual process to have secret lists, secret information, and
confidentiality, when we are literally talking about people's lives and
health. I don't think the Senator can come forward and meet his burden
of proof, to go back to the language of trial lawyers, that we should
replace the court system in America based on secret lists kept in his
office. That strikes me as a far cry from the kind of public debate
which we should invite for this bill.
Mr. SPECTER. Mr. President, will the Senator yield further for a
question?
Mr. DURBIN. I have been more than happy to yield, and I will continue
to yield.
Mr. SPECTER. How can the Senator call it a secret list when it is
available for his inspection?
Mr. DURBIN. I say to the Senator, when he makes it available for the
inspection of all Members and the American people, it is no longer a
secret list. Mr. President, is the Senator prepared to do that? That is
my question, without yielding the floor to the Senator.
Mr. SPECTER. I will review the matter with the view to see if we can
make it public. I am open to any modification which is reasonable. I am
not bound by any protocol, and I will go back to the providers of the
list to see if it can be made available. But when the Senator from
Illinois asserts that it is secret, he is simply wrong. It is not
secret. He can look at it. I think he raises a good point when he says
that nobody can make a copy of it.
Offhand, on horseback, on one foot, I think staffers should be able
to make a copy of it. Take the copy and show it to the Senator. I think
that is reasonable, with the agreement of the staffer and the Senator
that if we decide to retain the confidentiality, they will respect
that. I trust Senator Durbin and I trust his staff to honor
confidentiality if we stick with it.
As I say, I will review that as well. But Senator Durbin has to make
a decision. I am sure Senator Durbin has an open mind on this question.
Now that I reflect on it, I am not so sure he does have an open mind on
this question, and he doesn't have to have an open mind on this
question. I think he raises a good point when he says we ought to know
who contributes the money. I raised hell to get the information and
finally had to raise a subpoena to get the information. We have it so
that it is available for those who have to make a decision.
[[Page S833]]
When he carries the point further that he would like to see it made
public, if I can accommodate that, I will.
Mr. DURBIN. I was happy to yield again to the Senator, whom I respect
very much. I tell him, for the record, on May 25 of last year, we sent
a letter to him about Goldman Sachs, asking that we have some
information about the $140 billion figure, how it was arrived at, and
how it will be paid for. So this is not the first time this issue has
come up.
It is curious to me that we are writing a bill that is going to
change the laws of all the States of America, and if we are going to
close those courtrooms across America. Yet the Senator from
Pennsylvania had to issue a subpoena to obtain a list of the names of
the companies that are going to contribute to the trust fund. This is a
very strange process.
Usually, legislation emanates from within Congress and affects the
outside world. It appears that the secret list at issue emanated from
the outside and whoever created it wasn't anxious to share it. So if
there is skepticism by those of us critical of the bill, I think there
is good reason.
We never received a reply to our May letter of last year. It is an
indication to me that this whole process has been very unusual and very
different from any process I have seen.
Somewhere, someone has come up with a number as to how much we need
to compensate these victims, and someone has come up with a source on
how that number will be arrived at, and the chairman had to go to the
lengths of subpoenaing the information that was the basis for this bill
that will affect hundreds of thousands of Americans and their lives.
Mr. SPECTER. Mr. President, will the Senator will yield further?
Mr. DURBIN. I will be happy to yield.
Mr. SPECTER. When he says I haven't responded to his letter, I have
responded to his letter by getting him the information. The Senator
from Illinois is diligent, resourceful, and raises lots of questions. I
would challenge him to say I haven't responded to all of them.
Mr. DURBIN. I say to the chairman, he is the most responsive Member I
can think of, and I thank him for his service and friendship. I have
shared with him my concerns on this issue, and he has gone so far as to
issue a subpoena.
The point I wanted to make to the chairman is raising this issue was
not sua sponte. I started asking this question long ago as to why we
couldn't get the most fundamental----
Mr. SPECTER. Parliamentary inquiry: Does sua sponte apply to this
discussion? I withdraw the parliamentary inquiry.
When the Senator from Illinois says the chairman had to issue a
subpoena, I consider it a compliment. I have had to deal with
stakeholders on all sides who have been recalcitrant. We haven't--I,
we, Senator Leahy and I--haven't left any stone unturned. If people who
want this bill and are obligated to provide money won't give the
information I want, if they are for the bill and they are for the
position I am sponsoring, I am going to get tough about it. I am going
to get a subpoena so that Senator Durbin knows what is going on, and I
think the American people, through their elected representatives, will
know what is going on.
Does the Senator want me to yield? If I can get wider distribution, I
will.
Mr. DURBIN. Let me reclaim my time but also say to the chairman,
parenthetically, what we engaged in--yielding back and forth--draws
perilously close to debate on the Senate floor, which we try to avoid
at any cost. I will do my best to always yield to meaningful questions
and comments as those made by the chairman of the Senate Judiciary
Committee. But I want to return to my comments.
This is a curious situation, where the chairman of the committee who
wrote the bill had to issue a subpoena to get the information about
what the bill meant. Now that is a curious situation. It leads one to
believe that someone else, other than this committee, is writing the
bill. Who could that possibly be? Who has enough interest in this
matter to want to move forward with passing this bill outside of
Capitol Hill? I gave one example earlier of one corporation which
stands to gain $3.1 billion if this bill passes. Those are companies
very interested in this bill.
There has been a lot of talk on the floor about the lobbying effort
on behalf of this legislation. It has been huge.
(Ms. MURKOWSKI assumed the Chair.)
Mr. SPECTER. Madam President, will the Senator from Illinois yield
for a question?
Mr. DURBIN. After I finish my sentence, I will yield. I concede this
bill is a clash of special-interest titans on both sides. I think
proponents of the bill have invested a lot more in its passage than
those who oppose it. Maybe we will never know the true figures, but the
interesting thing is that the first bill of this Senate session is not
a bill to address the Medicare prescription drug crisis, it is not a
bill to provide affordable, accessible health care to Americans, it is
not a bill to deal with the energy crisis and the heating bills that
are killing us in the Midwest and the Northeast, it is not a bill to
deal with pension security for workers who are losing a lifetime of
pension investment to a merger or a bankruptcy or corporate sleight of
hand. It is a bill that is brought by lobby groups and special
interests that have invested tens of millions of dollars trying to
force this issue and bring this matter before us on the Senate floor.
Mr. SPECTER. Madam President, parliamentary inquiry: Has the Senator
from Illinois finished that sentence?
Mr. DURBIN. I just finished. That was a period.
Mr. SPECTER. There are a lot of semicolons in that sentence, then.
Mr. DURBIN. I am not yielding the floor unless the Senator wishes to
ask a question. Then I will be happy to yield.
Mr. SPECTER. There is a lot of competition for the floor. There are
three of us on the floor. A lot of competition for it.
When the Senator from Illinois talks about special interest groups,
there are others involved in this legislation and they are the victims.
They are thousands, tens of thousands of victims who are suffering
deadly diseases. Those are the people about whom this Senator is
concerned.
Yesterday I put into the Record an article from the front page of the
Hill about $3 million being spent by lobbyists to defeat this bill.
Today the New York Times has a detailed story about how much money is
being spent to defeat this bill.
It is true there are some who want this bill--the manufacturers and
some insurance companies. But the people who really want this bill are
the victims.
I take just a little umbrage at one sentence, one statement made by
the Senator from Illinois when he says that because I have to subpoena
material, it raises a question about who is writing the bill, that
somebody else is writing the bill.
Let me assure you, Madam President, and anybody who may be watching
on C-SPAN--if we had anybody, we lost them a long time ago--no special
interest has written this bill. It is a non sequitur. I have to respond
in some way to sua sponte. It is a non sequitur to say that because it
was necessary to subpoena information that somebody else wrote the
bill.
Mr. DURBIN. Without yielding the floor, would the Senator please tell
us what Government agency he subpoenaed for the information to produce
the secret list?
Mr. SPECTER. I will be glad to respond. I didn't subpoena any
governmental agency. We subpoenaed the companies who were obligated to
provide the money.
Mr. DURBIN. Without yielding the floor, would the Senator please
state for the Record the names of the nongovernment agencies, private
companies he had to subpoena to understand the underlying basis for
this trust fund and how $140 billion was arrived at?
Mr. SPECTER. I didn't have to subpoena anybody to understand the
underlying basis for this bill. This is my bill. I understood it when I
thought it through and when I wrote it. Will I provide the names of
those who are to be contributors? I do not have them at my disposal,
and I certainly don't have them in my mind. But the staffer from the
Senator from Illinois has already seen them and I would be glad to
personally take the Senator from Illinois to look at the list.
[[Page S834]]
Mr. DURBIN. Madam President, if this were a courtroom I would say the
witness is not responsive. I asked the Senator a very direct question:
Who did you send the subpoena to if it wasn't a government agency? And
the answer, he knows, is: A private company. The obvious question is:
Why are private companies writing a bill we have on the floor of the
Senate today? They are writing that bill because they have a deep,
personal interest in this bill. They are going to do quite well, thank
you. Some companies are going to end up, as a result of this
legislation, walking away from their legal liabilities in court for
asbestos injury and asbestos death. These are the companies that want
to see us close down the court system for these victims and create
something else because they are the winners.
I hope the Senator from Pennsylvania--I don't want to create any
umbrage, or raise any questions about his integrity. I am not. But I
hope he will at a later point in the day come to the floor and disclose
the names of the private companies that created the secret list that
suggests there may be thousands of corporations across America that
will have to contribute to this trust fund.
I wish to go to the most basic questions about the $140 billion.
Where did we come up with $140 billion? How can we suggest that over
the next 50 years or more that will be enough? It is important that it
is enough. Yesterday my friend, the Senator from Pennsylvania,
addressed this issue. He came to the floor and this is what Senator
Specter said about this $140 billion figure:
The figure of $140 billion was worked out by Senator Frist
and Senator Daschle about a year and half ago. It is a figure
which rose from that which was originally put in the trust
fund to that figure where CBO has given us the assurance that
the range of cost will be somewhere between $120 billion and
$135 billion. Under one contingency, it could go to $150
billion, but that is unlikely.
Senator Specter went on to say something else, and I think is a very
important statement. It is a long sentence, but bear with me:
We have within the structure of the bill a provision that
the administrator can make a reevaluation going through
certain preconditions so that if it looks like we're going to
exceed the $140 billion, we can make modifications in the
medical standards and criteria to stay within the $140
billion.
End of quote from the Senate floor. A statement by the chairman of
the Judiciary committee yesterday stating there will be modifications
in medical standards and criteria. Make no mistake what that means. It
means less money for victims. It means if this fund runs out of money,
the victims will receive even less. So the winners will be winning
more, the losers losing more. And the victims will be the ultimate all-
time losers in this situation.
I think it was an honest answer. I believe Chairman Specter was very
candid in what he said. He could have said that if we exceed $140
billion in claims, that we would return all the cases to the tort
system and the court system. But he knows if he said that, it would be
hard to explain how we get into this trust fund for a few years, close
the courthouse door, cut off all the pending lawsuits, and then declare
the trust fund doesn't work. He didn't say that.
He could have said the Federal taxpayers will have to step in at that
point and take care of the victims. But he knew that would cause a
problem, not just on his side of the aisle but across the Senate. A
Federal bailout is not viewed very positively when our Federal budget
is facing the deepest deficits in the history of the United States.
So he said, and I admire his candor, we will just reduce the amounts
we pay the victims. That is how we will make $140 billion work. That is
a very candid and straightforward, but harrowing answer.
To say to people, if you were in the midst of a lawsuit, if you have
worked around asbestos and have asbestosis and you are limited in your
activities and maybe in the span of your life, and you filed a lawsuit
against the company that exposed you to this asbestos, and you worked--
and I know this because I used to do this for a living--worked for
years to get that case into court with great sacrifices and
frustrations and motions and continuances, and you are finally there--
when this bill passes, if you don't have your case before a jury, you
are finished. Close the door. Take your file home. You get to start all
over.
Then what happens? You go into this trust fund, which on balance will
probably pay you less, and you hope and pray there will be enough money
there to pay you. If there is not, Senator Specter has said we will cut
back your pay and your compensation for being injured by asbestos until
we can hit this magic $140 billion number. That is the reality of this
bill.
I think it is fair to ask, Is the $140 billion figure accurate? I
have been through this on the Senate Judiciary Committee for several
years. Senator Orrin Hatch offered a version of this bill. He began by
saying all we need is $90 billion over 50 years. Then we got into a
committee debate and markups, and the figure moved up to $154 billion
during the course of committee process. At that time the CBO, the
Congressional Budget Office, estimated it would cost between $124 and
$136 billion for anticipated claims.
Since this virtual endorsement of the trust fund bill from 3 years
ago, the Congressional Budget Office has progressively but
unquestionably expressed greater and greater reservations about that
number, about the viability of the trust fund and whether the figure we
are talking about today is an honest figure to compensate victims.
Let me share this report from the Congressional Budget Office. I will
read it:
There is a significant likelihood that the fund's revenues
would fall short of the amount needed to pay valid claims, as
well as debt-service and administrative costs. There is also
some likelihood that the fund's revenues would be sufficient
to meet those needs. The final outcome cannot be predicted
with great certainty. Without a substantial increase in the
resources available to the fund, there is no way to guarantee
the fund will not either revert to the court system or
require additional funding.
That is an honest answer. When we ask this official organization of
Congress that is supposed to assess whether $140 billion is enough,
their honest answer is, we can't say either way, but we certainly can't
give you a guarantee that $140 billion is all that will be needed.
The Congressional Budget Office went on to say, in analyzing the bill
before us:
CBO expects the value of valid claims likely to be
submitted to the fund over the next 50 years could be between
$120 and $150 billion, not including possible financing (debt
services) costs.
Remember those words. Because it turns out the money from companies
will not come into the trust fund fast enough to pay the massive influx
of claims right at the start, the trust fund is going to have to borrow
that money. And in borrowing money, the trust fund has to pay interest
and finance costs. And all of the lamentations on the floor here about
attorney's fees notwithstanding, at the end of the day, we will find
that substantial amounts of money in the trust fund will be paid in
interest costs, from the borrowing to try to keep this fund afloat as
legitimate asbestos victims ask for their fair compensation.
That is a reality. It is a reality that suggests the $140 billion
figure cannot be substantiated. If this were an idea of Senator Daschle
and Senator Frist a year and a half ago, as much as I respect both of
them, and I respect them very much, I don't know that either one of
them is actuaries, nor do I know that they have the expertise to come
up with a magic figure to predict the cost of this trust fund over a
50-year lifespan.
Let's take some of these concerns directly.
The CBO states that the expected $120-$150 billion in
qualified asbestos injury claims on the trust fund ``does not
include possible financing costs and administrative expenses.
The interest cost of this borrowing [they say] would add
significantly to the long-term costs faced by the fund. . .
.''
What are the financing costs? We are talking about debt service,
money the Federal Government has to expend in order to either lend on
its own to the new trust fund or go to private capital markets. The
debt service costs could reach $50 billion or more.
We would find, then, that more than a third of the money going into
the trust fund would be used to pay out in interest costs, not in
victim compensation. Why? Because the secret and maybe soon public list
of contributions by companies and insurance companies
[[Page S835]]
indicates not enough will be coming into the fund to match all of the
injured victims across America who are going to be turning to this new
fund, which, at the same time, closes down the court system for
hundreds of thousands of American citizens.
Here is more of the CBO's analysis:
Because expenses would exceed revenues in many of the early
years of the fund's operations, the administrator would need
to borrow funds to make up the shortfall. The interest cost
of this borrowing would add significantly to the long-term
costs faced by the fund and contributes to the possibility
that the fund might become insolvent.
Is it worth the gamble? Is it worth the gamble for us to pass a fund
to close down the court system, to tell people who have worked for
months and years to bring their case to a judge or a jury that they are
now out of the system, then close the courtroom doors? Is it worth the
gamble to them and their families that our calculations are right?
Should we replace the court system on the possibility that we have
guessed right about $140 billion, that in fact it would not become
insolvent? Or should we shrug our shoulders and say, well, if we
guessed wrong, what is the worst thing that could happen? According to
the author of this bill, the victims will receive less money.
So when the chairman of the Judiciary Committee suggests that the
chorus of voices of victims is what brings us to the floor today, I
would say to him I am sure there are some who are in that chorus, but
it might not be much more than a small quartet. The larger choir of
victims across America has told us about their opposition to this bill.
I could read that list of victims, unions, and other groups into the
record. They are telling us this is the wrong thing to do. It is unjust
to close the courthouse door to thousands of people across America and
to say to them: Trust us, we have an idea for a trust fund. It has
never been tried before, we are not quite sure of the figure, the
contributors to the trust fund are on the secret list which may become
public, but trust us. It is well worth your life and your health.
There is a group called Bates White which testified before the Senate
Judiciary Committee, a group that has represented businesses and
various organizations.
In September 2005, this economic consulting firm issued a report
about this bill. I don't know why they conducted this report, but I
have read it and attended a Judiciary Committee hearing where Dr.
Charles Bates of that firm testified. According to the author, the
report examined the viability of the fund. They focused on two primary
categories of claimants who posed the greatest threat to the fund's
financial viability.
First, they conclude that the bill would create entitlements for many
individuals with lung and other cancers who were not compensated in the
historical tort environment. The Bates White report states this
entitlement likely will result in at least a tenfold increase in the
number of other cancer victims relative to the cases being brought in
our courts today.
Here is why. Based on epidemiological studies between 2000 and 2055,
some 3.5 million people in the eligible population covered by this bill
will develop lung or other cancers, not including mesothelioma.
Asbestos is only one of the myriad of significant risk factors that may
be causally related to lung and ``other'' cancers. But S. 852 would
compensate all cancer claimants who have minimal pleural or lung
changes based on subjective x-ray readings.
According to this study, the filing rates for the trust fund are also
expected to increase substantially over the historical rates in the
tort system due to the relative ease of the filing which is to be
created by this trust fund bill. Thus, according to Bates White, the
bill would compensate for a dramatically larger number of patients.
Second, the Bates White report concludes that the bill is going to
revive what they call ``dormant claims,'' which are asbestos injury
lawsuits that have been settled with most but not all defendants. The
bill allows some claimants who filed their lawsuits prior to 2000 to be
eligible for payment in the trust fund if those claims have not been
fully resolved. Thousands of such cases currently remain on court
dockets.
This incremental entitlement for the differential between the amounts
collected in such suits in settlement or judgments, and the amount
awardable from the fund, they estimate, could total up to $26 billion.
And if these victims seek to recover the difference, that would add
significantly to the cost of the trust fund.
Let me say at the outset that I think the court system as well as the
trust fund should be generous to victims. As I said earlier, I don't
know of a single victim of asbestos exposure who knowingly and
willingly exposed themselves. Many of them were duped by deception of
corporate officers who insisted there was no danger involved.
I am not questioning the decision in the bill to extend such
payments, but I do join Bates White in questioning whether the programs
set forth in the bill can be paid for. What Bates White has said is, if
you look at the bill as it is written, and the people who will be
compensated, it is going to cost dramatically more than earlier
estimates.
Based on these two factors and using very conservative economic
assumptions, the Bates White study concludes the bill would create
entitlement claims valued between $301 billion and $561 billion.
The bill's trust fund is capped at $140 billion. This study says the
amount of payouts could be more than double, or as much as three times,
or even more than that in actual payouts. That is how far we could have
missed the mark when it comes to this economic analysis underlying this
bill.
What this study found raises serious questions about the solvency of
this fund: Saying to the thousands of victims, Close up your court
case, stop working with your attorney, stop going to the courthouse, we
are going to take care of you, and then we don't. We come up with a
$140 billion trust fund that is inadequate to the needs of these
victims.
I also want to point out that Bates White updated their study
yesterday. The economists at this firm announced this week that they
found a $90 billion error in the Congressional Budget Office's analysis
of this same bill.
This is a serious issue. It should be serious enough to take this
bill off the calendar. If the CBO's estimate is wrong by $90 billion,
we have to stop where we are. We shouldn't go forward. Bates White's
new analysis demonstrates this oversight.
According to the numbers the Congressional Budget Office presents in
its own report, CBO asserts that 1.5 million individuals will receive
compensation for nonmalignant conditions, meaning they have bilateral
pleural disease and 5 or more years of exposure. Under this bill, these
victims are entitled to medical monitoring.
Yet, national cancer incidence rates establish that more than 200,000
of these claimants among the 1.5 million will eventually develop lung
or other cancers.
This means, if we take the CBO numbers as the baseline, there could
be an additional 200,000 claimants who will qualify for lung and other
cancer claims, which are paid out much higher levels of compensation in
this bill. Yet the Congressional Budget Office's current estimate takes
into consideration only 28,000 people in this category.
So, the new information from Bates White presents a real concern that
the Congressional Budget Office may have missed at least 170,000
potential victims who weren't considered in the CBO's earlier analysis.
The Congressional Budget Office relied on an arbitrary standard
assumption that only 15 percent of the population will ever file for
the higher claim. These additional claimants represent more than $90
billion in additional costs to the fund.
CBO's estimate currently assumes that 85 percent of qualifying
claimants who took the trouble to sign up for medical monitoring under
this bill would not file the paperwork to collect their entitlement if
they ever developed a more serious illness down the road. This is not a
credible scenario.
After all, isn't the purpose of medical monitoring to provide early
detection of these and other diseases, which means that more people
rather than fewer would have the opportunity to learn about such
illnesses?
As late as yesterday, there are new, fundamental questions being
raised about whether this trust fund at $140
[[Page S836]]
billion gives us an honest figure to work with. If it is not an honest
figure, it means as the years progress, we are going to have to reduce
payments to victims.
To suggest this is a victims bill is to overlook the obvious: the
starting point of the bill is so flawed. Let me show you some charts
about how this will be funded because I think they are a good
indication of the problem that the fund faces in convincing a majority
of the Senate to support this bill.
This is a chart which addresses the timing of this bill, comparing
when the liabilities will arise for claims coming into the fund, versus
when the revenues from the companies will come into the trust fund. As
you can see, the red line shows liabilities which are very high in the
earlier years, but you will notice the low green line is never adequate
to meet the needs of liability. From the outset, the fund is falling
behind. Simply stated, it is not collecting enough money to compensate
victims.
One of the arguments being made is we have to replace the court
system because it takes so long; there are delays. What is going to
happen when this fund doesn't have enough money and hundreds of
thousands of Americans who are sick and dying come for compensation?
At best, we will borrow money, adding more cost to the fund
dramatically, or we will tell them to wait in line until we have
received enough trust fund revenue to pay them. Or, I suppose, as the
chairman said yesterday, we will just say we can pay them now, but we
will have to pay them less than what we promised in this bill. That
appears to be the range of options based on the way we are dealing with
this issue.
Take a look at this chart which shows that liabilities will greatly
exceed the assets of the trust fund from the very start, and the
excess--the red line--continues to build over the years. This is a 50-
year period of time. You can see even with the revenue coming in that
it never matches the liabilities they anticipate. This chart doesn't
even include the new information from the Bates White study, which
could mean there is even a greater amount of shortfall in this trust
fund.
Let's talk about interest costs for a moment. The fund borrows in its
early years because, obviously, all the corporations on the secret list
can't come up with all the money they are supposed to produce
initially. Some of them will take a period of time. In fact, some of
them have told us to forget it, that this bill will end up bankrupting
them. So those companies will disappear.
But in the meantime, there are still needy victims and people who
would otherwise go to courts for compensation. The fund starts to
borrow in its first years to meet the shortfall but realizes barely
half the value of future revenue, and the other half has to be used to
pay interest.
Senator Hatch was here a few moments ago speaking about attorney's
fees and how that is taking money away from victims. Some would argue
that without an attorney, many victims would never have their day in
court or a chance to succeed in court. What we have here is the fact
that we will be paying into this trust fund and almost half of the
revenues will be spent on interest and administration. Out of the $140
billion in the trust fund--which may not be enough--almost half of it
is going to go to pay creditors, financial institutions, banks, maybe
foreign governments. I don't know who will lend money to this trust
fund. We will pay out interest to them, and we will have less to pay to
the victims.
This was really supposed to be an upfront, no-fault system to help
victims with $140 billion compensation over 50 years. It turns out that
the real steady winners are creditors of the fund. According to one
analysis, as little as 52 percent of the trust fund could be used to
pay the claimants and 48 percent for interest, which is almost half of
the amount of money during the life of this fund.
Some suggest that we are doing a great favor by creating this trust
fund. Well, it is a great favor for sure to credit institutions but to
the victims, it is not. As more money is paid out in interest, less is
available for the victims.
What the Senator who authored this bill said yesterday is, We will
just cut the compensation. That is the way we will make up the
difference. For every dollar of interest paid, we pay one dollar less
to someone who is dying of mesothelioma. That is how this is being
conducted.
The sponsors have put a lot of time in this bill, and it was a
Herculean task to try to address something 50 years in the future. I
concede to all of that. But shouldn't the people who are pushing for a
change have the burden of proving that change is an improvement over
status quo? Shouldn't that be the starting point of a debate?
If you want to change the current system, shouldn't you have the
burden of establishing that your change is a good one, and that $140
billion is the right figure, rather than to say that Senator Daschle
and Senator Frist thought it was a good figure? Shouldn't you have the
burden of showing that the input of money into the trust fund from the
secret list of corporations and insurance companies is going to be
adequate to meet the payouts of the victims? Shouldn't you have the
responsibility of showing that $140 billion is going to go to the
victims rather than to creditors and financial institutions and
interest and administrative costs?
Isn't that the starting point? I think it is. Once they have met that
burden of proof, then we can say: All right, we will compare the court
system to your trust fund and decide which is the better way to go. But
they have not met that burden of proof. They have asked us to accept on
faith that this trust fund is going to treat victims fairly on a timely
basis. I think many people are concerned about that.
There will be enormous amounts of claims that are expected to flood
into this trust fund on day one, and by that time all the cases in
court will be shut down if they are not at the jury stage. Let me
repeat that important fact. If the litigants are not presenting any
evidence in court, all of those cases will be shut down, according to
this bill.
You know those victims are going to turn around and say: My husband
is dying. My husband has limited activity and can't work. Where do I go
now?
They will be told: Come to the trust fund. Come to this $140 billion
trust fund.
We can expect a flood of applications in the early stages if this
trust fund is created. Will the Department of Labor be able to create
this new office and new bureaucracy to manage this flood of claims?
For those of you who have any doubts about the efficiency of
government and its ability to respond to millions of people in need, I
would suggest the following words: the Medicare prescription drug bill.
You know what I mean.
This system which was created 2 years ago by the Senate and the House
and signed by the President was supposed to compensate some 40 million
Medicare recipients for their prescription drugs. Ask any Senator in
this Chamber what they have heard back home. This is a disaster. They
had 2 years to be ready. And, unfortunately, this system is fatally
flawed. One critic said it is an unsalvageable fiasco and lives are at
stake. Senior citizens now wonder if they can get their prescription
drugs filled, and for some of those it is critical for them to just
keep going on a day-to-day basis.
Now they are being told in this bill to trust us again.
We are going to create a Federal trust fund where hundreds of
thousands of claims may come in initially and ask that they be
compensated on a timely basis, and they will be told by the Federal
Government, trust us, we will give you the money right away.
That is cold comfort for someone who has been sitting for a year or
two with medical records and lawyers getting ready to present their
case in court. But if they aren't among the fortunate few who have
brought their case to a jury or to a judge, presented their evidence,
and ended up with a verdict or settlement, then, unfortunately,
everything they have done is for naught. They are tossed out of the
system.
These victims deserve better than empty promises in this bill. They
and the Senate deserve solid information about how this bill will work
and remain solvent throughout the entire lifetime. Without such
information, the Senate should reject this bill.
[[Page S837]]
The PRESIDING OFFICER. The time for the recess has arrived.
Mr. DURBIN. Madam President, I yield the floor.
____________________