Congressional Budget Office Report: the FACT Act of 2012 is Fiscally Responsible

8/8/2012

On August 2, 2012, the Congressional Budget Office reported its analysis of the Furthering Asbestos Claim Transparency (FACT) Act of 2012, H.R. 4369, to the House Committee. In doing so, it highlighted the cost-effectiveness of implementing this legislation. For over 30 years, the Congressional Budget Office has produced independent, nonpartisan, analysis of economic and budgetary issues to support the Congressional budget process and educate the public. Though the Congressional Budget Office did not make policy recommendations, it reported on the cost estimate for implementation of the FACT Act. It also articulated why so many supporters of the legislation have been lauding this bill as the vehicle to increase transparency among trusts established through Chapter 11 bankruptcy reorganization caused by asbestos liability claims.

According to this non-partisan agency, the FACT Act would require asbestos bankruptcy trusts to submit quarterly reports to bankruptcy courts on both damages claims and payments to trust applicants. The Congressional Budget Office estimated that implementation of the FACT Act would have "no significant impact on the federal budget," because the courts, "would incur only minor costs to make that information publicly available." The agency found that the FACT Act would not impact direct spending or revenues. The Congressional Budget Office further reported that the FACT Act, "contains no intergovernmental mandates as defined in the Unfunded Mandates Reform Act (UMRA) and would not affect the budgets of state, local, or tribal governments."

As it stands now, there are about 60 active asbestos trusts nationwide. According to the Congressional Budget Office the expense to conform to the reporting requirements in the bill would fall below the annual threshold created for private-sector mandates. The agency concluded that the total cost of implementing the FACT Act would be far short of the $146 million 2012 budget.

The conclusions drawn by the Congressional Budget Office will no doubt augment supporters of the FACT Act. For months, supporters have argued that the FACT Act is necessary to increase transparency among trusts whose work with applicants has long been shrouded in secrecy. Now, supporters will be armed with non-partisan data to bolster their arguments that the FACT Act is also a fiscally responsible means to an end.

For more information on how your claims and businesses may benefit from this legislation, please contact David Governo at dgoverno@governo.com or Lonna Carter at lcarter@governo.com of the Governo Law Firm. Our firm represents small businesses and corporate clients in integrating legal planning into their business strategies and in defending toxic tort claims, for a range of substances including asbestos. Our attorneys are able to provide you with a roadmap to understanding key aspects of the legal system, including how legislation will impact your business plans.

For more information and related articles visit FACT Act of 2012.


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