S.Amdt. 2851

SA 2851. Mr. KYL submitted an amendment intended to be proposed to amendment SA 2746 proposed by Mr. Frist (for Mr. Specter (for himself and Mr. Leahy)) to the bill S. 852, to create a fair and efficient system to resolve claims of victims for bodily injury caused by asbestos exposure, and for other purposes; which was ordered to lie on the table; as follows:

On page 310, lines 15-16, strike “effect” and insert the following: “;provided, however, that any provision of such an injunction channeling asbestos claims to such a trust for resolution shall be of no force and effect.”

On page 312, line 18, strike “Notwithstanding” and all that follows through “retain such jurisdiction.”

On pages 359-60, strike subparagraphs (7) and (8) of subsection 405(g) and insert the following:

“(7) Establishment of master asbestos trust.--

(A) Creation.--Within 120 days after the determination of the Administrator under paragraph (1), the Administrator shall create a trust to be the successor to the asbestos trusts and any class action trust, to receive funds equal to the amount determined by the Administrator to be necessary to pay the remaining aggregate obligations to the asbestos trusts and any class action trust under paragraphs 1(A)(iii) and 1(B), and to use such funds for the exclusive purpose of providing benefits in accordance with the terms of this [master trust section?] to persons who would have held valid asbestos claims against the asbestos trusts or any class action trust had the Fairness in Asbestos Resolution Act of [2006] not been enacted and to otherwise defray the reasonable expenses of administering the master trust.

(B) Jurisdiction.--The United States District Court for the District of Columbia shall have exclusive jurisdiction, without regard to amount in controversy, over the master trust and all civil actions involving the application and construction of this subparagraph and the trust documents, including any action for the payment of benefits due under the terms of this subparagraph after exhaustion of trust remedies and any action for breach of fiduciary duty on the part of any fiduciary of the master trust.

(C) Trustees.--The district court shall appoint, upon petition by the Administrator after consultation with the Advisory Committee, three trustees to administer the master trust. Each trustee, and any successor to each trustee, must be independent, free of any adverse interest and have sufficient qualifications and experience to fulfill the responsibilities described in this section.

(D) Trust Advisory Committee.--The Administrator, in consultation with the Advisory Committee, shall appoint three persons to represent the interests of trust beneficiaries as members of a trust advisory committee to consult with and advise the trustees respecting the administration of the master trust and resolution of asbestos claims. At least one of the members of the trust advisory committee shall be selected from among individuals recommended by recognized national labor federations, and at least one of the members of the trust advisory committee shall be experienced in representing the interests of trust beneficiaries.

(E) Legal Representative.--The district court shall appoint, upon petition by the Administrator after consultation with the Advisory Committee, a legal representative of persons who may in the future have claims against the master trust for the purpose of protecting the rights of such persons respecting the master trust and consulting with and advising the trustees respecting the administration of the master trust and resolution of asbestos claims. The legal representative, and any successor to the legal representative, must be independent, free of any adverse interest and have sufficient qualifications and experience to fulfill the responsibilities described in this section. The legal representative shall have standing to appear and be heard as a representative of the future asbestos claimants in any civil action before the district court relating to the master trust. The legal representative shall not represent the interests of any person who has filed a claim for benefits against the master trust with respect to such claim.

(F) Trust Documents.--The Administrator, in consultation with the Advisory Committee, shall create such trust documents as may be necessary to create and govern the operations of the master trust. The trust documents shall contain provisions that (i) address the payment of compensation to and reimbursement of necessary and reasonable expenses of the trustees, trust advisory committee members and legal representative, and appointment of successors to such persons, subject to approval by the district court in the case of successors to the trustees and legal representative, and (ii) provide for the master trust's obligation to defend and indemnify the Administrator, trustees, members of the trust advisory committee, legal representative and their respective successors against and from legal actions and related losses to the extent that a corporation is permitted under the laws of Delaware to defend and indemnify its officers and directors.

(G) Duty of Trustees.--The trustees shall administer the master trust in accordance with the terms of this subparagraph and the Trust Documents for the exclusive purpose of providing benefits to persons with valid claims against the master trust and otherwise defraying the reasonable expenses of administering the master trust, and shall manage and invest the assets of the trust with the care, skill, prudence, and diligence, under like circumstances prevailing at the time, that a prudent person acting in like capacity and manner would use.

(H) Claims Resolution Procedures.--The trustees, in consultation with the trust advisory committee and the legal representative, shall adopt claims resolution procedures that provide for fair and expeditious payment of benefits to all persons described in subpart A of this subparagraph. The claims resolution procedures adopted and implemented by the trustees shall contain the following features:

(i) pro rata distributions of award amounts that are subject to adjustment, if necessary, based on periodic evaluations of the value of the master trust's assets and estimates of the numbers and values of present and future asbestos claims for benefits that may be awarded by the master trust and other mechanisms that provide reasonable assurance that the master trust will value, and be in a financial position to pay, similarly situated asbestos claims presented to it that involve similar diseases in substantially the same manner;

(ii) proof requirements, claim submission procedures, and claim evaluation and allowance procedures that provide for expeditious filing and evaluation of all asbestos claims submitted to the master trust;

(iii) provisions for priority review and payment of claimants whose circumstances require expedited evaluation and compensation;

(iv) exposure requirements for asbestos claimants to qualify for a remedy that fairly reflect the legal responsibility of at least one entity whose liabilities were channeled to an asbestos trust or any class action trust; and

(v) review and dispute resolution procedures for disputes regarding the master trust's disallowance or other treatment of claims for benefits.

(I) Medical Criteria.--The trustees, in consultation with the trust advisory committee and the legal representative, shall adopt and maintain uniform medical criteria that fairly reflect a current state of applicable law and scientific and medical knowledge. The trustees may adopt the medical criteria of section 121.

(J) Award Amounts.--The trustees, in consultation with the trust advisory committee and the legal representative, shall adopt a matrix of award amounts for disease categories that applies to all claimants who qualify for payment under the medical criteria and claims resolution procedures. The trustees may adopt the matrix of award amounts of section 131 or such other matrix that the trustees determine provides similar benefits for similar claims and fairly reflects the liability of the entities whose liabilities were channeled to the asbestos trusts and any class action trust.

(K) Payments to Claimants.--The trustees shall pay each qualifying claimant a benefit equal to the product of the master trust payment percentage and the award amount to such claimant. The master trust payment percentage at any given time shall be determined by the trustees based on their periodic evaluation of the master trust's assets and projected claims as described in subpart (H)(i) of this subparagraph.

(L) Amendments.--The trustees, in consultation with the trust advisory committee and legal representative, may amend the trust documents, the claims resolution procedures, the medical criteria and the award matrix to the extent necessary to more effectively and efficiently carry out the purpose of the master trust. Further, if the substantive consolidation of the asbestos trusts and any class action trust effected by this subsection is held to be unconstitutional, the trustees shall adopt amendments to the trust documents, claims resolution procedures, medical criteria and award matrix as may be necessary to bring the master trust in compliance with the Constitution, including if necessary amendments requiring, for each such trust, separate claims resolution procedures, award amounts and accounting of assets and liabilities.

(8) Payment To Master Trust.--The amount determined by the Administrator to be necessary to pay the remaining aggregate obligations to the asbestos trusts and any class action trust under paragraphs 1(A)(iii) and 1(B) shall be transferred to the master trust within 90 days of termination under this subsection. Any individual with a valid asbestos claim against any asbestos trust or class action trust shall be entitled to seek relief on account of such claim from the master trust described in subparagraph (7) in accordance with the provisions of such subparagraph.”

On page 357, strike lines 12 through 24 and insert the following:

“(B) Remaining Obligations.--For purposes of subparagraph (A)(ii)(II), the remaining obligations to the asbestos trust of the debtor and the class action trust shall be determined by multiplying the amount of assets transferred to the Fund by such debtor or class action trust by the applicable percentage set forth in the following schedule depending on the year in which a termination shall take effect under paragraph (2). The applicable percentage shall be adjusted between years by quarter-annual increments.

Year after Enactment in Which the Termination is EApplicable Percentage

1................................................................100.00

2.................................................................93.95

3.................................................................87.98

4.................................................................82.40

5.................................................................76.97

6.................................................................71.66

7.................................................................66.50

8.................................................................61.48

9.................................................................56.61

10................................................................52.01

11................................................................47.65

12................................................................43.52

13................................................................39.62

14................................................................35.96

15................................................................32.55

16................................................................29.36

17................................................................26.39

18................................................................23.65

19................................................................21.11

20................................................................18.76

21................................................................16.62

22................................................................14.66

23................................................................12.86

24................................................................11.24

25.................................................................9.78

26.................................................................8.48

27.................................................................7.32

28.................................................................6.29

29.................................................................5.37

30.................................................................4.55

31.................................................................3.83

32.................................................................3.20

33.................................................................2.66

34.................................................................2.18

35.................................................................1.77

36.................................................................1.42

37.................................................................1.13

38.................................................................0.89

39.................................................................0.70

40.................................................................0.54

41.................................................................0.40

42.................................................................0.29

43.................................................................0.19

44.................................................................0.12

45.................................................................0.05

46 and thereafter................................................0.00”

On page 360, line 21, strike the period and insert the following:

“; provided, however, that any individual who would have held a valid asbestos claim against any asbestos trust or class action trust had the Fairness in Asbestos Resolution Act not been enacted may obtain relief on account of such claim only from the master trust described in subparagraph (g)(7) in accordance with the provisions of such subparagraph.”

On page 364, line 4, strike “; and” and insert a period.

On page 364, strike lines 5-14.