PROTECT Asbestos Victims Act of 2019

II 116TH CONGRESS 1ST SESSION S. 766 To amend title 11, United States Code, to promote the investigation of fraudulent claims against certain trusts, to amend title 18, United States Code, to provide penalties against fraudulent claims against certain trusts, and for other purposes. IN THE SENATE OF THE UNITED STATES MARCH 13, 2019 Mr. TILLIS (for himself, Mr. GRASSLEY, Mr. CORNYN, and Mr. CRAPO) intro- duced the following bill; which was read twice and referred to the Com- mittee on the Judiciary A BILL To amend title 11, United States Code, to promote the investigation of fraudulent claims against certain trusts, to amend title 18, United States Code, to provide pen- alties against fraudulent claims against certain trusts, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Providing Responsible 4 Oversight of Trusts to Ensure Compensation and Trans- 5 parency for Asbestos Victims Act of 2019’’ or the ‘‘PRO- 6 TECT Asbestos Victims Act of 2019’’. 7 VerDate Sep 11 2014 02:41 Mar 23, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S766.IS S766 kjohnson on DSK79L0C42 with BILLS 2 •S 766 IS SEC. 2. REDUCTION OF FRAUDULENT CLAIMS AND DE- 1 MANDS RELATING TO CERTAIN TRUSTS. 2 (a) IN GENERAL.—Section 524(g) of title 11, United 3 States Code, is amended— 4 (1) in paragraph (4)(B)(i), by striking ‘‘the 5 court appoints a legal representative’’ and inserting 6 ‘‘the United States trustee or bankruptcy adminis- 7 trator appoints, under paragraph (10), a future 8 claims representative’’; and 9 (2) by adding at the end the following: 10 ‘‘(8) INVESTIGATION OF FRAUDULENT CLAIMS 11 AND DEMANDS.— 12 ‘‘(A) IN GENERAL.—Notwithstanding sec- 13 tion 302(d)(3) of the Bankruptcy Judges, 14 United States Trustees, and Family Farmer 15 Bankruptcy Act of 1986 (28 U.S.C. 581 note), 16 rule 9035 of the Federal Rules of Bankruptcy 17 Procedure, or any other provision of law, in any 18 judicial district of the United States, the United 19 States trustee may investigate the administra- 20 tion and operation of a trust described in para- 21 graph (2)(B)(i), including a trust described in 22 paragraph (2)(B)(i) that was created before the 23 date of enactment of the PROTECT Asbestos 24 Victims Act of 2019. 25 VerDate Sep 11 2014 02:41 Mar 23, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S766.IS S766 kjohnson on DSK79L0C42 with BILLS 3 •S 766 IS ‘‘(B) AUTHORITY OF THE UNITED STATES 1 TRUSTEE.—In conducting an investigation 2 under subparagraph (A), the United States 3 trustee shall have the authority— 4 ‘‘(i) to conduct discovery, including by 5 any means of discovery available to a 6 trustee in an action under chapter 5 of 7 title 11, relating to the trust, a claimant of 8 the trust, or a claim against the trust, in- 9 cluding a claim filed by a claimant against 10 the trust in a bankruptcy court or other 11 forum, notwithstanding the effect of any 12 order purporting to limit the access of the 13 United States trustee to any information 14 relating to that discovery; 15 ‘‘(ii) to conduct an audit or contract 16 for an audit of any claim or demand paid, 17 or to be paid, in whole or in part by the 18 trust; 19 ‘‘(iii) if the United States trustee has 20 reasonable grounds to believe that a false 21 claim or demand to be paid in whole or in 22 part by a trust was made, to refer the 23 matter to the United States attorney for 24 the relevant judicial district, and, on the 25 VerDate Sep 11 2014 02:41 Mar 23, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S766.IS S766 kjohnson on DSK79L0C42 with BILLS 4 •S 766 IS request of the United States attorney, as- 1 sist the United States attorney in carrying 2 out a prosecution based on that false claim 3 or demand; and 4 ‘‘(iv) to request that the court exercise 5 any authority and impose remedies avail- 6 able to it, including those— 7 ‘‘(I) under the terms of the plan 8 of reorganization to prevent abuse or 9 mismanagement of the trust; and 10 ‘‘(II) under section 105. 11 ‘‘(C) STANDING.—In carrying out this 12 paragraph, the United States trustee shall have 13 standing to raise, to appear, and to be heard on 14 any matter for which the court has jurisdiction 15 or for which the court has reserved jurisdiction 16 under the terms of the plan of reorganization. 17 ‘‘(9) ACCESSING TRUST INFORMATION.— 18 ‘‘(A) IN GENERAL.—Subject to section 107 19 and any appropriate protective order, a trust 20 described in paragraph (2)(B)(i) shall, on writ- 21 ten request, provide, in a timely manner, any 22 information relating to any payment from, and 23 any demand for payment from, the trust to a 24 VerDate Sep 11 2014 02:41 Mar 23, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S766.IS S766 kjohnson on DSK79L0C42 with BILLS 5 •S 766 IS party to an action at law or equity if the action 1 relates to liability for asbestos exposure. 2 ‘‘(B) COSTS.—A trust described in para- 3 graph (2)(B)(i) may require, from the person 4 making a request under subparagraph (A), pay- 5 ment of any reasonable cost incurred to comply 6 with the requirements under subparagraph (A). 7 ‘‘(10) APPOINTMENT OF FUTURE CLAIMS REP- 8 RESENTATIVES.— 9 ‘‘(A) IN GENERAL.—On notification by a 10 plan proponent of the intention of the plan pro- 11 ponent to seek an injunction under this sub- 12 section, the United States trustee or bank- 13 ruptcy administrator, after consultation with 14 parties in interest, shall appoint, subject to the 15 approval of the court, a disinterested individual 16 to serve as the future claims representative. 17 ‘‘(B) SUPPORT.— 18 ‘‘(i) IN GENERAL.—The future claims 19 representative, subject to the approval of 20 the court, may employ 1 or more attor- 21 neys, accountants, or other professional 22 persons to represent the future claims rep- 23 resentative or assist the future claims rep- 24 resentative in carrying out the duties of 25 VerDate Sep 11 2014 02:41 Mar 23, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S766.IS S766 kjohnson on DSK79L0C42 with BILLS 6 •S 766 IS the future claims representative under this 1 subsection. 2 ‘‘(ii) QUALIFICATIONS.—An attorney, 3 accountant, or other professional person 4 employed under clause (i) to represent or 5 assist the future claims representative— 6 ‘‘(I) shall be a disinterested per- 7 son; and 8 ‘‘(II) may not represent any 9 other entity having an adverse interest 10 in connection with the case. 11 ‘‘(11) POWER OF THE COURT.—Notwith- 12 standing any other provision of law, including para- 13 graph (1)(B), sections 1127, 1141, and 1144 of this 14 title, and section 157 of title 28, the court may issue 15 any order, process, or judgment that is necessary 16 and appropriate— 17 ‘‘(A) to carry out the provisions of para- 18 graphs (8) and (9); or 19 ‘‘(B) to enforce or implement a court order 20 or prevent an abuse of process relating to a 21 trust described in paragraph (2)(B)(i). 22 ‘‘(12) BENEFITS UNDER MEDICARE.— 23 ‘‘(A) POTENTIAL ELIGIBLE CLAIMANTS.— 24 Not later than 60 days after a claim is sub- 25 VerDate Sep 11 2014 02:41 Mar 23, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S766.IS S766 kjohnson on DSK79L0C42 with BILLS 7 •S 766 IS mitted to a trust described in paragraph 1 (2)(B)(i), the administrator of the trust shall 2 determine whether the claimant is entitled to 3 benefits under the Medicare program under 4 title XVIII of the Social Security Act (42 5 U.S.C. 1395 et seq.). 6 ‘‘(B) REQUIRED INFORMATION.—If a 7 claimant is determined to be entitled to benefits 8 under subparagraph (A), the administrator of 9 the trust shall submit to the Secretary of 10 Health and Human Services, in the form and 11 manner (including frequency) specified by the 12 Secretary of Health and Human Services, the 13 information described in section 1862(b)(8)(B) 14 of Social Security Act (42 U.S.C. 15 1395y(b)(8)(B)).’’. 16 (b) COMPENSATION.—Section 330(a)(1) of title 11, 17 United States Code, is amended— 18 (1) by inserting ‘‘a future claims representative 19 appointed under section 524(g)(10)(A),’’ after ‘‘sec- 20 tion 333,’’; and 21 (2) by inserting ‘‘, 524(g)(10)(B),’’ after ‘‘sec- 22 tion 327’’. 23 VerDate Sep 11 2014 02:41 Mar 23, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S766.IS S766 kjohnson on DSK79L0C42 with BILLS 8 •S 766 IS (c) REOPENING CASES.—Section 350 of title 11, 1 United States Code, is amended by adding at the end the 2 following: 3 ‘‘(c) INVESTIGATIONS BY UNITED STATES TRUST- 4 EE.—On the request of the United States trustee, a case 5 shall be reopened in the court in which that case was 6 closed in order to enable the United States trustee to con- 7 duct an investigation under section 524(g)(8).’’. 8 SEC. 3. CRIMINAL PENALTIES. 9 Section 152 of title 18, United States Code, is 10 amended— 11 (1) in paragraph (8), by striking ‘‘or’’ after the 12 semicolon; 13 (2) by striking the comma at the end of para- 14 graph (9) and inserting a semicolon; and 15 (3) by inserting after paragraph (9) the fol- 16 lowing: 17 ‘‘(10) knowingly and fraudulently makes a false 18 representation to a trust described in section 19 524(g)(2)(B)(i) of title 11, or any official of a trust 20 described in that section, in relation to an investiga- 21 tion conducted under section 524(g)(8)(A) of that 22 title; or 23 ‘‘(11) knowingly and fraudulently makes a false 24 claim or demand to be paid in whole or in part by 25 VerDate Sep 11 2014 02:41 Mar 23, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S766.IS S766 kjohnson on DSK79L0C42 with BILLS 9 •S 766 IS a trust described in section 524(g)(2)(B)(i) of title 1 11,’’. 2 SEC. 4. AUTHORITY OF UNITED STATES TRUSTEE. 3 Section 586 of title 28, United States Code, is 4 amended by adding at the end the following: 5 ‘‘(g) INVESTIGATION OF FRAUDULENT CLAIMS AND 6 DEMANDS.— 7 ‘‘(1) IN GENERAL.—The United States trustee 8 may investigate the administration and operation of 9 a trust, including a trust that was created before the 10 date of enactment of the PROTECT Asbestos Vic- 11 tims Act of 2019— 12 ‘‘(A) described in section 524(g)(2)(B)(i) 13 of title 11; or 14 ‘‘(B) established under section 105(a) of 15 title 11 for the purpose of assuming the asbes- 16 tos-related liabilities of a debtor. 17 ‘‘(2) AUTHORITY OF THE UNITED STATES 18 TRUSTEE.—In conducting an investigation under 19 subparagraph (A), the United States trustee shall 20 have the authority— 21 ‘‘(A) to conduct discovery, including by 22 any means of discovery available to a trustee in 23 an action under chapter 5 of title 11, relating 24 to the trust, a claimant of the trust, or a claim 25 VerDate Sep 11 2014 02:41 Mar 23, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S766.IS S766 kjohnson on DSK79L0C42 with BILLS 10 •S 766 IS against the trust, including a claim filed by a 1 claimant against the trust in a bankruptcy 2 court or other forum, notwithstanding the effect 3 of any order purporting to limit the access of 4 the United States trustee to any information re- 5 lating to that discovery; 6 ‘‘(B) to conduct an audit or contract for 7 an audit of any claim or demand paid, or to be 8 paid, in whole or in part by the trust; 9 ‘‘(C) if the United States trustee has rea- 10 sonable grounds to believe that a false claim or 11 demand to be paid in whole or in part by a 12 trust was made, to refer the matter to the 13 United States attorney for the relevant judicial 14 district, and, on the request of the United 15 States attorney, assist the United States attor- 16 ney in carrying out a prosecution based on that 17 false claim or demand; and 18 ‘‘(D) to request that the court exercise any 19 authority and impose remedies available to it, 20 including those— 21 ‘‘(i) under the terms of the plan of re- 22 organization to prevent abuse or mis- 23 management of the trust; and 24 ‘‘(ii) under section 105. 25 VerDate Sep 11 2014 02:41 Mar 23, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S766.IS S766 kjohnson on DSK79L0C42 with BILLS 11 •S 766 IS ‘‘(3) STANDING.—In carrying out this sub- 1 section, the United States trustee shall have stand- 2 ing to raise, to appear, and to be heard on any mat- 3 ter for which the court has jurisdiction or for which 4 the court has reserved jurisdiction under the terms 5 of the plan of reorganization. 6 ‘‘(4) JUDICIAL DISTRICTS ESTABLISHED FOR 7 ALABAMA AND NORTH CAROLINA.—Notwithstanding 8 section 302(d)(3) of the Bankruptcy Judges, United 9 States Trustees, and Family Farmer Bankruptcy 10 Act of 1986 (28 U.S.C. 581 note), rule 9035 of the 11 Federal Rules of Bankruptcy Procedure, or any 12 other provision of law, the United States trustee for 13 the appropriate region described in section 581(a) 14 shall have the authority to carry out this subsection 15 with respect to a trust described in paragraph (1) in 16 a case that is filed in a judicial district established 17 for the State of Alabama or North Carolina.’’. 18 Æ VerDate Sep 11 2014 02:41 Mar 23, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6301 E:\BILLS\S766.IS S766 kjohnson on DSK79L0C42 with BILLS