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C.A.R. Arms Businesses with First Tool to Determine S. 852's Asbestos Tax Burden

Online Calculator Computes Each Company's Liability Under Specter-Leahy Trust Fund Scheme

WASHINGTON, Aug. 18 /PRNewswire/ -- Today, the Coalition for Asbestos Reform (C.A.R.) launched an easy-to-use online calculator that will allow businesses to estimate their share of the $140 billion in new taxes mandated by S. 852, the so-called "Fairness in Asbestos Injury Resolution Act of 2005," scheduled for the Senate floor this fall. The calculator, at http://www.asbestosreform.org is the strongest tool yet to demonstrate the potentially devastating financial effects the Specter-Leahy bill will have on hundreds of businesses across the nation.

"Will your company be like Hopeman Brothers, which will have to close its doors on the very day this ill-conceived trust fund scheme is signed into law?" asked C.A.R. Chairman Thomas O'Brien. "A handful of Fortune 100 corporations which have promoted this bill don't want other companies to know that they shifted their burden of financial responsibility onto the backs of smaller and mid-size businesses. The calculator's hard numbers make it pretty clear who is driving the bus on asbestos litigation reform."

A Raw Deal and A Sweetheart Deal: Hopeman Brothers vs. General Electric The calculator, built using the specifications in the Senate Judiciary passed version of S. 852, demonstrates that while corporate giant General Electric would pay $825 million over 30 years, Hopeman Brothers, with 2002 revenues of approximately $100 million, can expect to pay $495 million. Because the annual payment for Hopeman Brothers far exceeds the company's historical and expected annual income, the company would have no choice but to liquidate if the Specter/Leahy bill becomes law. "S. 852's glaring inequity is one of the principal reasons companies are lining up to oppose its enactment," O'Brien added. "But perhaps most troubling, there are scores of companies not yet aware of the impact of this bill -- that's why C.A.R. developed this important calculator."

Under Specter-Leahy, companies will fall into one of six "tiers" based on their prior asbestos expenditures. Companies will then be slotted into three, four or five "sub-tiers" based on their FY2002 gross revenues. But while companies will be assigned levels of liability, they won't know their exact asbestos tax until all of the companies in their tier have been identified. Even then, after the tiers are calculated, the Trust Fund Administrator has the ability to assess surcharges if revenues are not enough to fully fund the Trust Fund. This period of assessment and adjustment will likely drive the tax higher.

It is this uncertainty that led seven Senate Judiciary Committee Republicans, who voted to report the bill out of Committee, to write additional views expressing "serious reservations" with the bill: "[W]e are satisfied neither that [S. 852's] allocations formula (inflows) is fair and adequate nor that the cost of the trust fund (outflows) will be sustainable."

And four committee Democrats who opposed the bill, wrote that, "The Asbestos Trust Fund created by this bill is seriously underfunded." Despite the bill's considerable uncertainty, C.A.R.'s online calculator is the best way for businesses which have been asbestos defendants to assess the potentially devastating consequences to their bottom line if S. 852 is signed into law.

Using C.A.R.'s Calculator
Companies can calculate their asbestos tax liability by visiting
http://www.asbestosreform.org where they will be asked three questions:

1. Are you in bankruptcy proceedings?
2. What are your FY2002 revenues?
3. How much have you, your affiliates and your insurance carrier paid in total asbestos costs through December 31, 2002?

After learning their possible financial liability, companies who are interested in joining C.A.R. to fight for what may be their very survival, can also find information about becoming a member on the website, http://www.asbestosreform.org .

C.A.R. is a group of smaller and medium sized businesses and their insurance companies committed to educating U.S. businesses and policymakers about the serious flaws in S. 852. The coalition mobilized in June to launch a major national campaign to explain the effect of the Specter/Leahy bill on hundreds of local businesses that face potential asbestos liability, most of whom are unaware of the devastating impact of $140 billion in new taxes S. 852 authorizes to finance the Trust Fund mandated by the bill.

SOURCE Coalition for Asbestos Reform
Web Site: http://www.asbestosreform.org