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SEC. 204. ASSESSMENT ADMINISTRATION.
(a) In General- Subject to subsection (m), each defendant participant or affiliated group shall pay to the Fund in the amounts provided under this subtitle as 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 first 23 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), 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.
(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.
(D) REINSTATEMENT- Following the expiration of the hardship adjustment period provided for under this section and during the funding period prescribed under subsection (a) or (m), 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; or
(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; and
(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. 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.
(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.
(i) IN GENERAL- Following the termination of an inequity adjustment under subparagraph (A), and during the funding period prescribed under subsection (a) or (m), 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 $250,000,000, except to the extent 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).
(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.
(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.
(h) Minimum Annual Payments-
(1) IN GENERAL- Except as provided under subsection (m), the aggregate annual payments of defendant participants to the Fund shall be at least $2,500,000,000 for each calendar year in the first 23 years of the Fund, or until such shorter time as the condition set forth in subsection (a)(2) of this section 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) fail in any year to raise at least $2,500,000,000 net of any adjustments under subsection (d), 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), the Administrator may 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 180 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.
(B) RELIEF- The Administrator shall establish procedures to grant a defendant participant relief from its initial payment obligation where the participant shows that it is likely to qualify for a financial hardship adjustment, and that failure to provide interim relief would cause severe irreparable harm. The Administrator's refusal to grant such relief is subject to immediate judicial review under section 303.
(2) INITIAL YEAR: TIER I- Not later than 90 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, a statement of the debtor's 2002 revenues, determined in accordance with section 203(a)(2), and 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.
(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 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.
(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- 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.
(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 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.
(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, 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.
(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 under subsection (h) of this section, excess monies up to a maximum of $250,000,000 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) of this section 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) of this section is met, for any purpose that the Fund may serve under this Act, unless the Administrator shall have published a final certification requiring a contingent call under subsection (m)(3)(D).
(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), in the event there are excess monies paid by defendant participants in any given year, such monies--
(A) 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 subsection (h) net of any adjustments under subsection (d) is reached each year; and
(B) if the condition set forth in subsection (a)(2) of this section is met, for any purpose that the Fund may serve under this Act, unless the Administrator shall have published a final certification requiring a contingent call under subsection (m)(3)(D).
(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 net of any adjustments under subsection (d) in any given year, the Administrator may impose on each defendant participant a surcharge as necessary to raise the balance required to attain the minimum aggregate annual payment 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).
(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.
(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) Contingent Call for Mandatory Additional Payments-
(1) IN GENERAL- Notwithstanding section 202(a)(2) and subsection (a) of this section, the Administrator may require additional payments to the Fund by defendant participants, subsequent to the payment by defendant participants of the maximum aggregate payment obligation in section 202(a)(2), as provided in this subsection.
(2) CONTINGENT CALL PAYMENTS- If the Administrator has certified or certifies the necessity of additional payments as provided in paragraph (3), the Administrator may require the defendant participants to pay in accordance with paragraph (5) up to an aggregate maximum of $10,000,000,000 of additional payments subsequent to the payment by defendant participants of the maximum aggregate payment obligation in section 202(a)(2).
(3) CONTINGENT CALL CERTIFICATION-
(A) IN GENERAL- Before invoking the authority to require additional mandatory payments under this subsection, the Administrator shall certify, after consultation with appropriate experts, that the entirety of the contingent call amount invoked is necessary to meet the Fund's obligations.
(B) INITIAL NOTICE- Before making any certification under subparagraph (A), the Administrator shall publish a notice in the Federal Register of the proposed certification, including a description and explanation of the Administrator's analysis supporting the certification of the Administrator.
(C) COMMENTS FROM DEFENDANT PARTICIPANTS- Not later than 60 days after the publication of the notice under subparagraph (B), a defendant participant may provide the Administrator with additional information to support a determination that all or some of the additional payments from defendant participants set forth in the notice are or are not required.
(i) IN GENERAL- The Administrator shall publish a final notice in the Federal Register after consideration of all comments submitted under subparagraph (C).
(ii) WRITTEN NOTICE- If the Administrator certifies the need for the contingent call for additional payments, the Administrator shall provide each defendant participant with written notice of that defendant participant's schedule of payments under this subsection.
(4) BORROWING CAPACITY- To the extent provided in section 221(b)(3), the Administrator may borrow against the mandatory additional payments required under this subsection at any time after issuing the final certification under paragraph (3).
(5) ALLOCATION- Any additional payments to the Fund by defendant participants under this subsection shall be allocated among them in proportion to the amounts provided under sections 202 and 203 (as modified by subsections (b), (d), (f), and (g) of this section). If the Administrator determines that the full amount of funding that would otherwise be generated in any year by the funding provisions of sections 202, 203, and 204 is not required for purposes of this subsection, the Administrator shall reduce the amounts paid by all defendant participants on the same basis.
(6) ENFORCEMENT- The additional payments required under this subsection may be enforced in the same manner and to the same extent as the enforcement of payments under section 223.
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Asbestos Attorneys - FAIR Act of 2005 - TITLE I - Asbestos Claims Resolution