September, 2005
The economic consulting firm of Bates White, LLC has prepared an analysis of the economic viability of the Asbestos Injury Claims Resolution Fund (Fund) proposed under the FAIR ACT. In its September, 2005 Report, titled Analysis of S. 852 Fairness In Asbestos Injury Resolution (FAIR) Act, Bates White concluded that the proposed Fund was not financially viable. Based upon what the Report described as conservative assumptions, the FAIR ACT would create entitlements valued at $300 billion. The statutory funding level of the Fund is $140 billion, leaving a $160 billion shortfall. As a result of the shortfall, the Fund would sunset within three years of its inception with a debt of more than $45 billion. Bates White identified five additional factors it described as risk factors for the Fund, as follows:

1)	Bates White estimates that more than 3.5 million individuals who satisfy the occupational exposure criteria of the FAIR ACT will develop lung and other cancers between 2001 and 2055. Such claims could be more viable under the FAIR ACT criteria than in the tort system, resulting in increased claims.
2)	Bates White estimates the 2000 population who meet the occupational exposure criteria at 27 million to 34 million. Using the higher figure of 34 million would result in increased claims.
3)	Family members of eligible workers may be eligible for compensation, resulting in increased claims.
4)	The Fund may compensate dormant tort claimants who have previously settled with most, but not all asbestos Defendants. If such claims were presented, they would occur in the Fund's early years, increasing expenditures.
5)	Likely entitlements the FAIR ACT would create for individuals impaired by naturally occurring asbestos or from the mining area around Libby, Montana could further increase the shortfall of the Fund.

In aggregate, Bates White estimates the additional risk factors identified above would increase entitlements under the Fund to $695 billion.
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August 25, 2005
Pursuant to its charge to assess the impact of potential legislation upon the federal budget, the Congressional Budget Office (CBO) completed its analysis of the potential impact of the FAIR ACT upon the federal budget on August 25, 2005. Entitled CONGRESSIONAL BUDGET OFFICE COST ESTIMATE: S.852, Fairness in Asbestos Injury Resolution Act of 2005, the Report outlined the potential impact upon the federal budget of the revenue, spending, and borrowing provisions of the FAIR ACT. It concluded as follows:

1)	Over the 50 year life of the Asbestos Injury Claims Resolution Fund (Fund), the maximum actual revenues to be collected would be up to $140 billion, but could be significantly less.
2)	The value of valid claims likely to be submitted over the 50 year life of the Fund could be between $120 billion, and $150 billion, not including debt service costs and administrative costs.
3)	Over the initial 10 year period of the Fund, CBO estimates the Fund will collect about $63 billion from asbestos Defendants, insurance companies, and existing Asbestos Trusts.
4)	Over the initial 10 year period of the Fund, CBO estimates the Fund will make expenditures of $70 billion to eligible claimants, start-up costs, investment transactions, and administrative expenses.
5)	CBO expects sums paid into the Fund to be treated as federal revenues, and expenditures treated as new federal direct spending.
6)	Net receipts and expenditures of the Fund will increase projected federal budget deficits over the 2006-2015 period by about $6.5 billion (excluding debt service costs).
7)	CBO estimates the Fund Administrator will exercise its borrowing authority in the amount of $8 billion during the initial 10 year period of the Fund.
8)	CBO estimates that the FAIR ACT would cause an increase in direct federal spending greater than $5 billion in at least one 10 year period from 2016 to 2055.
9)	CBO estimates the Fund would face more than half of all anticipated claims expenses in its first 10 years, while it would receive roughly constant collections from insurers and Defendant firms over its first 30 years.
10)	A more precise forecast of the Fund’s performance over its 50 year life is not possible because there is little basis for predicting the claims volume, approved claims, or the pace of such claims approvals.

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June 30, 2005
On June 30, 2005, the Senate Judiciary Committee issued its Report to the full Senate on the Fairness in Asbestos Injury Resolution Act of 2005 (“FAIR ACT”). This Report, consisting of a Majority Report together with Additional, and Minority Views, from the Senators on the Judiciary Committee who voted the FAIR ACT out of Committee on May 26, 2005.
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June 30, 2005
While most attention with respect to Congressional action on asbestos litigation reform has focused on the FAIR ACT in the Senate, the Fairness in Asbestos Injury Resolution Act of 2005 (“FAIR ACT”) was introduced in the House of Representatives on March 17, 2005.
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June 30, 2005
A bill has been introduced in the United States House of Representatives to provide for the exclusive handling of asbestos-related claims, and silica-related claims, within the federal Court system, under a “medical criteria” approach.
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May 26, 2005
On May 26, 2005, the Senate Judiciary Committee passed the Fairness In Asbestos Injury Resolution Act of 2005 (“FAIR ACT”), S. F. 852, by a vote of 13 to 5. The FAIR ACT bill then moved to the Senate floor for consideration by the full Senate.
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April 18, 2005
Former Solicitor General Theodore B. Olson presented a letter to Senate Judiciary Committee Member Senator John Cornyn discussing potential constitutional infirmities with the FAIR ACT from the point of view of existing Asbestos Trusts established under Section 524(g) of the Bankruptcy Act. Under the FAIR ACT, the assets of such existing Asbestos Trusts are a significant funding source, estimated to exceed $7.6 billion. Certain Asbestos Trusts contend that contribution of their assets to the proposed Asbestos Injury Claims Resolution Fund constitutes an unconstitutional taking of private property without just compensation, tampers with final judicial judgments in violation of the separation of powers, and violates equal protection by treating the bankruptcy assets of the Assets Trusts differently than other prior asbestos-related judgments.
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