[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1756 Introduced in Senate (IS)]
108th CONGRESS
1st Session
S. 1756
To amend the Internal Revenue Code of 1986 to protect the health
benefits of retired miners and to restore stability and equity to the
financing of the United Mine Workers of America Combined Benefit Fund
by providing additional sources of revenue to the Fund, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
October 17, 2003
Mr. Conrad (for himself, Mr. Smith, Mr. Breaux, Mr. Cochran, Ms.
Landrieu, and Mr. Craig) introduced the following bill; which was read
twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to protect the health
benefits of retired miners and to restore stability and equity to the
financing of the United Mine Workers of America Combined Benefit Fund
by providing additional sources of revenue to the Fund, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE, ETC.
(a) Short Title.--This Act may be cited as the ``Coal Industry
Retiree Health Benefit Stability and Fairness Act''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title, etc.
TITLE I--FINANCING PROVISIONS
Subtitle A--Federal Funds
Sec. 101. Mandatory transfer of general funds to Combined Benefit Fund.
Sec. 102. Annual audit.
Sec. 103. Appointment of Government trustees.
Subtitle B--Premiums
Sec. 111. Modifications of premiums to reflect transfers from general
fund.
Sec. 112. Refunds to certain operators.
Sec. 113. Reduction in annual premiums to Combined Benefit Fund if
surplus exists.
Sec. 114. Refund of contributions paid by certain small entities to
United Mine Workers Combined Benefit Fund.
Sec. 115. First year payments of 1988 operators.
Sec. 116. Liability in the event of prefunding.
Sec. 117. Definition of successor in interest.
TITLE II--RETROACTIVE PROVISIONS
Sec. 201. Reform of retroactive provisions of Coal Industry Health
Benefit System.
TITLE I--FINANCING PROVISIONS
Subtitle A--Federal Funds
SEC. 101. MANDATORY TRANSFER OF GENERAL FUNDS TO COMBINED BENEFIT FUND.
(a) In General.--Section 9705 (relating to transfers to the
Combined Benefit Fund) is amended by adding at the end the following
new subsection:
``(c) Mandatory Transfers From General Fund.--
``(1) In general.--There are hereby authorized and
appropriated, out of any amounts in the Treasury not otherwise
appropriated, to the Combined Fund such sums as may be
necessary to--
``(A) pay any benefit or administrative costs of
unassigned beneficiaries of the Combined Fund remaining
after the transfer under subsection (b), and
``(B) eliminate any annual deficit in any premium
account of the Combined Fund as certified by the
Trustees of the Combined Fund.
Deficits referred to in subparagraph (B) shall be certified by
the trustees only after utilizing and taking into account all
premiums and other government reimbursements to the Fund.
``(2) Use of funds.--Any amounts transferred under
paragraph (1) shall be available without fiscal year
limitation.
``(3) Transfer.--The Secretary of the Treasury shall
transfer amounts appropriated under paragraph (1) on October 1
of each fiscal year.''.
(b) Transfer From Abandoned Mine Reclamation Fund.--Section
9705(b)(2) (relating to use of funds) is amended to read as follows:
``(2) Use of funds.--Any amount transferred under paragraph
(1) for any fiscal year shall be used to pay any benefit or
administrative costs of unassigned beneficiaries of the
Combined Fund for the plan year in which transferred.''
(c) Effective Date.--The amendments made by this section shall
apply to fiscal years beginning after September 30, 2003.
SEC. 102. ANNUAL AUDIT.
(a) In General.--Section 9702 (relating to establishment of the
Combined Fund) is amended by adding at the end the following:
``(d) Annual Audit.--
``(1) Audit.--The Comptroller General of the United States
shall conduct an annual audit of the Combined Fund. Such audit
shall include--
``(A) a review of the progress the Combined Fund is
making toward a managed care system as required under
this subchapter, and
``(B) a review of the use of, and necessity for,
amounts transferred to the Combined Fund under section
9705(c).
``(2) Report.--The Comptroller General shall report the
results of any audit under paragraph (1) to the Secretary of
the Treasury and to the appropriate committees of Congress,
including the Comptroller General's recommendations (if any) as
to any administrative savings which may be achieved without
reducing the effective level of benefits under section 9703.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to plan years of the Combined Fund beginning after the date of
the enactment of this Act.
SEC. 103. APPOINTMENT OF GOVERNMENT TRUSTEES.
(a) In General.--Section 9702(b)(1) (relating to the Board of
Trustees), as amended by section 201(c), is amended by striking ``and''
at the end of subparagraph (B), by striking the period at the end of
subparagraph (C) and inserting ``; or'', and by inserting after
subparagraph (C) the following new subparagraph:
``(D) 2 persons designated by the Secretary of the
Treasury.''
(b) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
Subtitle B--Premiums
SEC. 111. MODIFICATIONS OF PREMIUMS TO REFLECT TRANSFERS FROM GENERAL
FUND.
(a) Elimination of Unassigned Beneficiaries Premium.--Section
9704(d) (establishing unassigned beneficiaries premium) is amended to
read as follows:
``(d) Unassigned Beneficiaries Premium.--
``(1) Plan years ending on or before september 30, 2003.--
For plan years ending on or before September 30, 2003, the
unassigned beneficiaries premium for any assigned operator
shall be equal to the applicable percentage of the product of
the per beneficiary premium for the plan year multiplied by the
number of eligible beneficiaries who are not assigned under
section 9706 to any person for such plan year.
``(2) Plan years beginning on or after october 1, 2003.--
For plan years beginning on or after October 1, 2003, there
shall be no unassigned beneficiaries premium.''.
(b) Premium Accounts.--
(1) Crediting of accounts.--Section 9704(e)(1) (relating to
premium accounts; adjustments) is amended by inserting ``and
amounts transferred under section 9705 (b) or (c)'' after
``premiums received''.
(2) Shortfalls.--Section 9704(e)(3) (relating to shortfalls
and surpluses) is amended--
(A) by striking ``shortfall or'' each place it
appears in subparagraph (A),
(B) by striking ``reduced or increased, whichever
is applicable,'' in subparagraph (A) and inserting
``reduced'',
(C) by striking ``or the unassigned beneficiaries
premium account'' in subparagraph (B), and
(D) by striking ``Shortfalls and surpluses'' in the
heading and inserting ``Surpluses''.
(c) Effective Date.--The amendments made by this section shall
apply to plan years of the Combined Fund beginning after September 30,
2003.
SEC. 112. REFUNDS TO CERTAIN OPERATORS.
(a) In General.--Section 9704 (relating to the liability of
assigned operators) is amended by adding at the end the following new
subsection:
``(j) Refunds to Certain Operators.--The Combined Fund shall,
before December 31, 2003, refund to an assigned operator which was an
assigned operator prior to the date of the enactment of this subsection
(and any related person to such operator) an amount equal to the sum
of--
``(1) any amount paid by such operator or person to the
Combined Fund (and not previously refunded) by reason of the
operator having been a signatory to a pre-1974 coal wage
agreement, and
``(2) interest on the amount under paragraph (1) at the
overpayment rate established under section 6621 for the period
from the payment of such amount to the refund under this
subsection.''
(b) Effective Date.--The amendment made by subsection (a) shall
take effect on the date of the enactment of this Act.
SEC. 113. REDUCTION IN ANNUAL PREMIUMS TO COMBINED BENEFIT FUND IF
SURPLUS EXISTS.
(a) In General.--Part II of subchapter B of chapter 99 (relating to
financing of Combined Benefit Fund) is amended by inserting after
section 9704 the following new section:
``SEC. 9704A. REDUCTIONS IN HEALTH BENEFIT PREMIUM IF SURPLUS EXISTS.
``(a) General Rule.--If this section applies to any plan year, the
per beneficiary premium used for purposes of computing the health
benefit premium under section 9704(b) for the plan year shall be the
reduced per beneficiary premium determined under subsection (c).
``(b) Years to Which Section Applies.--
``(1) In general.--This section applies to any plan year
beginning after September 30, 2003, if the trustees determine
that the Combined Fund has an excess reserve for the plan year.
``(2) Excess reserve.--For purposes of this section--
``(A) In general.--The term `excess reserve' means,
with respect to any plan year, the excess (if any) of--
``(i) the projected net assets as of the
close of the test period for the plan year,
over
``(ii) the projected 3-month asset reserve
as of such time.
``(B) Projected net assets.--For purposes of
subparagraph (A)(i), the projected net assets shall be
the amount of the net assets which the trustees
determine will be available at the end of the test
period for projected fund benefits. Such determination
shall be made in the same manner used by the Combined
Fund to calculate net assets available for projected
fund benefits in the Statement of Net Assets (Deficits)
Available for Fund Benefits for purposes of the monthly
financial statements of the Combined Fund for the plan
year beginning October 1, 2003.
``(C) Projected 3-month asset reserve.--For
purposes of subparagraph (A)(ii), the projected 3-month
asset reserve is an amount equal to 25 percent of the
projected expenses (including administrative expenses)
from the health benefit premium account and unassigned
beneficiaries premium account for the plan year
immediately following the test period. The
determination of such amount shall be based on the 10-
year forecast of the projected net assets and cash
balance of the Combined Fund prepared annually by an
actuary retained by the Combined Fund.
``(D) Test period.--For purposes of this section,
the term `test period' means, with respect to any plan
year, that plan year and the following plan year.
``(c) Reduced Per Beneficiary Premium.--For purposes of this
section, the reduced per beneficiary premium for any plan year to which
this section applies is the per beneficiary premium determined under
section 9704(b)(2) without regard to this section, reduced (but not
below zero) by--
``(1) the excess reserve for the plan year, divided by
``(2) the total number of eligible beneficiaries which are
assigned to assigned operators under section 9706 as of the
close of the preceding plan year.
``(d) Termination of Premium Reduction.--If, on any day during a
plan year to which this section applies, the Combined Fund has net
assets available for projected fund benefits (determined in the same
manner as projected net assets under subsection (b)(2)(B)) in an amount
less than the projected 3-month asset reserve determined under
subsection (b)(2)(C) for the plan year--
``(1) this section shall not apply to months in the plan
year beginning after such day, and
``(2) the monthly installment under section 9704(g)(1) for
such months shall be equal to the amount which would have been
determined if the health benefits premium under section 9704(b)
had not been reduced under this section for the plan year.''
(b) Conforming Amendments.--
(1) Section 9704(a) (relating to annual premiums) is
amended by striking ``Each'' and inserting ``Subject to section
9704A, each''.
(2) The table of sections for part II of subchapter B of
chapter 99 is amended by inserting after the item relating to
section 9704 the following new item:
``Sec. 9704A. Reductions in health
benefit premium if surplus
exists.''
(c) Effective Date.--The amendments made by this section shall
apply to plan years of the Combined Fund beginning after September 30,
2003.
SEC. 114. REFUND OF CONTRIBUTIONS PAID BY CERTAIN SMALL ENTITIES TO
UNITED MINE WORKERS COMBINED BENEFIT FUND.
(a) In General.--Part II of subchapter B of chapter 99, as amended
by section 113, is amended by inserting after section 9704A the
following new section:
``SEC. 9704B. REFUNDS OF ANNUAL PREMIUMS OF CERTAIN SMALL ENTITIES.
``(a) General Rule.--The Combined Fund shall refund to each
eligible small entity any premiums paid by the entity to the Combined
Fund under section 9704 for any plan year of the Combined Fund which
began before October 1, 2003. This section shall not apply to any
premium which was previously refunded.
``(b) Eligible Small Entity.--For purposes of this section, the
term `eligible small entity' means an assigned operator, but only if,
as determined under the records of the Combined Fund, such operator (or
any related person of such operator)--
``(1) was not a signatory to the 1981 or later National
Bituminous Coal Wage Agreement or any `me too' agreement
related to such Coal Wage Agreement;
``(2) reported credit hours to the UMWA 1974 Pension Plan
on fewer than ten classified mine workers in every month during
its last year of operations under the National Bituminous Coal
Wage Agreement of 1978 or any `me too' agreement related to
such Coal Wage Agreement;
``(3) has had not more than 60 beneficiaries, including
eligible dependents of retired miners, assigned to it under
section 9706 (determined without regard to beneficiary
assignments relieved by the Social Security Administration);
``(4) was assessed premiums by the Combined Fund, made
payments pursuant to those assessments, and has no delinquency
as of September 30, 2003; and
``(5) is not directly engaged in the production or sale of
coal engaged in the production of coal as of September 30,
2003.''
(b) Conforming Amendment.--The table of sections for part II of
subchapter B of chapter 99 is amended by inserting after the item
relating to section 9704A the following new item:
``Sec. 9704B. Refunds of annual premiums
of certain small entities.''
(c) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 115. FIRST YEAR PAYMENTS OF 1988 OPERATORS.
(a) In General.--So much of section 9704(i)(1)(D) as precedes
clause (ii) is amended to read as follows:
``(D) Premium reductions and refunds.--
``(i) 1st year payments.--In the case of a
1988 agreement operator making payments under
subparagraph (A)--
``(I) the premium of such operator
under subsection (a) shall be reduced
by the amount paid under subparagraph
(A) by such operator for the plan year
beginning February 1, 1993, and
``(II) if the amount so paid
exceeds the operator's liability under
subsection (a), the excess shall be
refunded to the operator before
December 31, 2003.''
(b) Effective Date.--The amendment made by subsection (a) shall
take effect on the date of the enactment of this Act.
SEC. 116. LIABILITY IN THE EVENT OF PREFUNDING.
(a) In General.--Section 9704 is amended--
(1) by striking ``Any'' in the last sentence of subsection
(a) and inserting ``Except as provided in subsection (k),
any'', and
(2) by adding at the end the following new subsection:
``(k) Related Persons Relieved of Liability Funded Through
Voluntary Employees' Beneficiary Association.--
``(1) In general.--If a qualified voluntary employees'
beneficiary association is established with respect to any
signatory operator, then, as of the date determined under
paragraph (2)--
``(A) the last sentence of subsection (a) shall not
apply to any related person with respect to the
operator (determined without regard to this
subsection), and
``(B) all such persons shall permanently cease to
be treated for purposes of this subchapter as related
persons with respect to the signatory operator.
``(2) Timing of limitation on liability.--The date
determined under this paragraph shall be the first date by
which all of the following have occurred:
``(A) The qualified voluntary employees'
beneficiary association's enrolled actuary (as defined
in section 7701(a)(35)), using actuarial methods and
assumptions each of which is reasonable and which are
reasonable in the aggregate (as determined by such
enrolled actuary), determines the balance of funds held
by the association, resulting from 1 or more
contributions to the association and earnings thereon,
equals or exceeds the sum of--
``(i) the present value of the total
premium liability of the signatory operator for
its assignees under section 9704 with respect
to the Combined Fund, plus
``(ii) the amount necessary to pay
administrative and other incidental expenses of
such association.
``(B) The enrolled actuary files a signed actuarial
report with the Secretary containing--
``(i) the date of the actuarial valuation
applicable to the report,
``(ii) a description of the funding method
and actuarial assumptions used to determine
costs of the association,
``(iii) a statement by the enrolled actuary
signing the report that to the best of the
actuary's knowledge the report is complete and
accurate and that in the actuary's opinion the
actuarial assumptions used are in the
aggregate--
``(I) reasonably related to the
experience of the association and to
reasonable expectations, and
``(II) represent the actuary's best
estimate of anticipated experience of
the association, and
``(iv) such other information as may be
necessary to fully and fairly disclose the
actuarial position of the association.
``(C) The signatory operator provides security (in
the form of a bond, letter of credit, or cash escrow)
to the trustees of the 1992 UMWA Benefit Plan which--
``(i) is solely for the purpose of paying
premiums for beneficiaries described in section
9712(b)(2)(B),
``(ii) is in an amount equal to 1 year's
liability of the signatory operator under
section 9711, determined by using the average
cost of such operator's liability during its
prior 3 calendar years, and
``(iii) is to remain in place for a period
of 5 years.
``(D) 30 calendar days have elapsed after the
report required by subparagraph (B) is filed with the
Secretary, along with a description of the security
required by subparagraph (C), and the Secretary has not
notified the association's enrolled actuary in writing
that the requirements of this subparagraph have not
been satisfied.
``(3) Qualified voluntary employees' beneficiary
association.--For purposes of this subsection, the term
`qualified voluntary employees' beneficiary association' means,
with respect to a signatory operator, an association described
in section 501(c)(9)--
``(A) which is established by the operator, a
related person to the operator (determined without
regard to this subsection), or a member of a controlled
group of corporations which includes the operator;
``(B) the purpose of which is exclusively--
``(i) to satisfy the premium liability of
the signatory operator with respect to the
Combined Fund,
``(ii) to fund health benefits provided
pursuant to a collective bargaining agreement,
including benefits for individuals covered by
sections 9711 and 9712, or to fund premiums for
insurance exclusively covering such benefits,
and
``(iii) to pay administrative and other
incidental expenses of such association;
``(C) no part of the assets of which may be used
for, or diverted to, any purpose other than the
purposes described in subparagraph (B); and
``(D) payments from which may be made for the
purposes described in subparagraph (B)(ii) only to the
extent that--
``(i) the signatory operator no longer has
an obligation to make payments under
subparagraph (B)(i); or
``(ii) during any annual accounting period
of the association such payments do not exceed,
in the aggregate, 90 percent of the excess of--
``(I) fair market value of the
association's assets, over
``(II) the present value of the
liability described in subparagraph
(B)(i).
Amounts under subparagraph (D)(ii) shall be determined, as of
the end of the association's prior year annual accounting
period, by the association's enrolled actuary (as defined in
section 7701(a)(35)) using actuarial methods and assumptions
each of which is reasonable and which are reasonable in the
aggregate (as determined by such enrolled actuary).
``(4) Other rules relating to associations.--For purposes
of this subsection--
``(A) if a qualified voluntary employees'
beneficiary association makes a payment, the
association's enrolled actuary shall, within 30 days
after the end of the association's annual accounting
period which includes the payment, file with the
Secretary an actuarial report containing the
information described in paragraph (2)(B) and a
statement that the requirements of paragraph (3)(D)
have been satisfied during the prior year; and
``(B) a signatory operator, or member of the
controlled group of corporations which includes such
signatory operator, which has previously established an
association under section 501(c)(9) for purposes which
include purposes described in paragraph (3) may use
funds from such previously established association to
fund all or a portion of the association established
under this subsection.''
(b) Conforming Amendment.--Section 419A(f)(5)(A) is amended by
inserting ``, including a qualified voluntary employees' beneficiary
association (as defined in section 9704(k))''.
(c) Effective Date.--The amendments made by this section shall
apply with respect to associations established after the date of the
enactment of this Act.
SEC. 117. DEFINITION OF SUCCESSOR IN INTEREST.
(a) In General.--Subsection (c) of section 9701 is amended by
adding at the end the following new paragraph:
``(8) Successor in interest.--
``(A) Safe harbor.--The term `successor in
interest' shall not include any person--
``(i) who is an unrelated person to a
seller, and
``(ii) who purchases for fair market value
assets, or all the stock of a related person,
in a bona fide, arm's-length sale which is
subject to section 5 of the Securities Act of
1933 (15 U.S.C. 77f et seq.) or the Securities
Exchange Act of 1934 (15 U.S.C.78a et seq.).
``(B) Unrelated person.--The term `unrelated
person' means a purchaser who does not bear a
relationship to the seller described in section 267(b).
``(C) Contingent liability.--This paragraph shall
only apply if the contract for sale provides that, if
the seller fails to make a premium payment to the
Combined Fund during the first 5 plan years beginning
after the sale, then the purchaser shall be secondarily
liable for any liability to the Combined Fund it would
have had but for the provisions of this paragraph.
``(D) No inference.--Nothing in this paragraph
shall be construed to infer that a purchaser in a sale
not described in this paragraph is a successor in
interest.''
(b) Effective Date.--The amendment made by subsection (a) shall
apply to transactions after the date of the enactment of this Act.
TITLE II--RETROACTIVE PROVISIONS
SEC. 201. REFORM OF RETROACTIVE PROVISIONS OF COAL INDUSTRY HEALTH
BENEFIT SYSTEM.
(a) Agreements Covered by Health Benefit System.--
(1) In general.--Section 9701(b)(1) (defining coal wage
agreement) is amended to read as follows:
``(1) Coal agreements.--
``(A) 1988 agreement.--The term `1988 agreement'
means the collective bargaining agreement between the
settlors which became effective on February 1, 1988.
``(B) Coal wage agreement.--The term `coal wage
agreement' means the 1988 agreement and any predecessor
to the 1988 agreement.''
(2) Conforming amendment.--Section 9701(b) (relating to
agreements) is amended by striking paragraph (3).
(b) Definitions Applicable to Operators.--
(1) Signatory operator.--Section 9701(c)(1) (defining
signatory operator) is amended to read as follows:
``(1) Signatory operator.--The term `signatory operator'
means a 1988 agreement operator.''.
(2) 1988 agreement operator.--Section 9701(c)(3) (defining
1988 agreement operator) is amended to read as follows:
``(3) 1988 agreement operator.--The term `1988 agreement
operator' means--
``(A) an operator which was a signatory to the 1988
agreement, or
``(B) a person in business which, during the term
of the 1988 agreement, was a signatory to an agreement
(other than the National Coal Mine Construction
Agreement or the Coal Haulers' Agreement) containing
pension and health care contribution and benefit
provisions which are the same as those contained in the
1988 agreement.
Such term shall not include any operator who was assessed, and
paid the full amount of, contractual withdrawal liability to
the 1950 UMWA Benefit Plan, the 1974 UMWA Benefit Plan, or the
Combined Fund.''
(3) Conforming amendments.--
(A) Section 9711(a) is amended by striking
``maintained pursuant to a 1978 or subsequent coal wage
agreement''.
(B) Section 9711(b)(1) is amended by striking
``pursuant to a 1978 or subsequent coal wage
agreement''.
(c) Modifications To Reflect Reachback Reforms.--
(1) Board of trustees of combined fund.--
(A) In general.--Section 9702(b)(1) is amended--
(i) by striking ``one individual who
represents'' in subparagraph (A) and inserting
``two individuals who represent'',
(ii) by striking subparagraph (B) and
redesignating subparagraphs (C) and (D) as
subparagraphs (B) and (C), respectively, and
(iii) by striking ``(A), (B), and (C)'' in
subparagraph (C) (as so redesignated) and
inserting ``(A) and (B)''.
(B) Conforming amendment.--Section 9702(b)(3) is
amended to read as follows:
``(3) Special rule.--If the BCOA ceases to exist, any
trustee or successor under paragraph (1)(A) shall be designated
by the 3 employers who were members of the BCOA on October 24,
1992, and who have been assigned the greatest number of
eligible beneficiaries under section 9706.''
(C) Transition rule.--Any trustee serving on the
date of the enactment of this Act who was appointed to
serve under section 9702(b)(1)(B) of the Internal
Revenue Code of 1986 (as in effect before the amendments made by this
paragraph) shall continue to serve until a successor is appointed under
section 9702(b)(1)(A) of such Code (as in effect after such
amendments).
(2) Assignment of beneficiaries.--Section 9706 (relating to
assignment of eligible beneficiaries) is amended by adding at
the end the following:
``(h) Assignment as of October 1, 2003.--
``(1) In general.--Effective October 1, 2003, the
Commissioner of Social Security shall--
``(A) revoke all assignments to persons other than
1988 agreement operators for purposes of assessing
premiums for periods after September 30, 2003,
``(B) make no further assignments to persons other
than 1988 agreement operators, and
``(C) terminate all unpaid liabilities of persons
other than 1988 agreement operators with respect to
eligible beneficiaries whose assignment to such persons
is pending on October 1, 2003.
``(2) Reassignment upon purchase.--This subsection shall
not be construed to prohibit the reassignment under subsection
(b)(2) of an eligible beneficiary.''
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