To amend the Internal Revenue Code of 1986 to provide that net operating losses shall not be reduced in connection with a discharge of indebtedness in certain chapter 11 bankruptcy cases involving asbestos-related claims.

Amends the Internal Revenue Code to permit taxpayers in chapter 11 bankruptcy proceedings initiated before July 28, 2005, who have asbestos-related liabilities exceeding $250 million, to elect not to reduce their net operating losses by amounts discharged in such proceedings.