To amend the Internal Revenue Code of 1986 to protect the health benefits of steel industry retirees by expanding the availability of the refundable tax credit to the health insurance costs paid by former employers.

Summary: Steel Industry Retiree Benefits Protection Act of 2003 - Amends the Internal Revenue Code to allow the 65 percent health insurance costs credit, in the case of a qualified steel company, for qualifying coverage of a qualified steel industry retiree and qualifying family members under a qualified health insurance plan.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Steel Industry Retiree Benefits 
Protection Act of 2003''.

SEC. 2. EXTENSION OF REFUNDABLE CREDIT TO FORMER EMPLOYERS FOR HEALTH 
              INSURANCE PAYMENTS FOR CERTAIN STEEL INDUSTRY RETIREES.

    (a) In General.--Subsection (a) of section 35 of the Internal 
Revenue Code of 1986 is amended to read as follows:
    ``(a) In General.--
            ``(1) Credit allowed to eligible individuals.--In the case 
        of an individual, there shall be allowed as a credit against 
        the tax imposed by subtitle A an amount equal to 65 percent of 
        the amount paid by the taxpayer for coverage of the taxpayer 
        and qualifying family members under qualified health insurance 
        for eligible coverage months beginning in the taxable year.
            ``(2) Credit allowed for payments for eligible steel 
        industry retirees.--In the case of a qualified steel company, 
        there shall be allowed as a credit against the tax imposed by 
        subtitle A an amount equal to 65 percent of the amount paid 
        during the taxable year by the qualified steel company for 
        qualifying coverage of an eligible steel industry retiree and 
        qualifying family members under qualified health insurance.
For purposes of paragraphs (1) and (2), amounts paid for coverage shall 
not include any premiums paid for the Medicare supplemental insurance 
program established under part B of title XVIII of the Social Security 
Act.''.
    (b) Qualifying Coverage.--Subsection (g) of section 35 of such Code 
(relating to special rules) is amended by redesignating paragraph (9) 
as paragraph (10) and inserting after paragraph (8) the following new 
paragraph:
            ``(9) Qualifying coverage.--For purposes of subsection 
        (a)(2)--
                    ``(A) In general.--Coverage shall not be treated as 
                qualifying coverage unless at least 50 percent of the 
                cost of such coverage for all eligible steel industry 
                retirees who are retired from the applicable qualified 
                steel company, and qualifying family members, 
                determined on a combined basis, for such taxable year 
                is paid or incurred by such qualified steel company.
                    ``(B) Special rule relating to collective 
                bargaining.--Subparagraph (A) may be satisfied 
                separately with respect to coverage provided to 
                eligible steel industry retirees pursuant to a 
                collective bargaining agreement.''.
    (c) Definition of Eligible Steel Industry Retiree.--
            (1) In general.--Subsection (c) of section 35 of such Code 
        is amended by adding at the end the following new paragraph:
            ``(5) Eligible steel industry retiree.--
                    ``(A) In general.--The term `eligible steel 
                industry retiree' means, with respect to any month, any 
                individual who--
                            ``(i) is a retiree of a qualified steel 
                        company, and
                            ``(ii) is receiving retiree health benefits 
                        in accordance with an employee benefit plan 
                        (within the meaning of section 3 (3) of the 
                        Employee Retirement Income Security Act of 
                        1974) which is established, maintained, or 
                        contributed to by the retiree's former employer 
                        and is in effect on or after January 1, 2000, 
                        or is no longer receiving such benefits as a 
                        result of the termination of coverage under 
                        such benefit plan on or after January 1, 2000, 
                        pursuant to an order of bankruptcy court, by 
                        operation of bankruptcy law, or by agreement 
                        with an authorized representative as provided 
                        in section 1114 of title 11, United States 
                        Code.
                    ``(B) Retiree.--For purposes of this paragraph, the 
                term `retiree' means, with respect to a qualified steel 
                company, an individual (including any eligible 
                surviving spouse of an individual) who has met any 
                years of service or disability requirements under an 
                employee benefit plan described in subparagraph (A)(ii) 
                which are necessary to receive retiree health benefits 
                under the plan, and at least 50 percent of whose years 
                of service were performed in the United States on 
                behalf of a qualified steel company.
                    ``(C) Qualified steel company.--The term `qualified 
                steel company' means--
                            ``(i) a person who was engaged on or before 
                        January 1, 2003, in--
                                    ``(I) the production or manufacture 
                                of a steel mill product,
                                    ``(II) the mining or processing of 
                                iron ore or beneficiated iron ore 
                                products, or
                                    ``(III) the production of coke for 
                                use in a steel mill product, or
                            ``(ii) a labor organization that, in the 
                        aggregate at one or more qualified steel 
                        companies, represents at least 10,000 
                        employees.
                    ``(D) Qualified steel company.--The term `qualified 
                steel company' includes any person who, on or before 
                January 1, 2003, was engaged in the transportation of 
                any steel product or iron ore products solely or 
                principally for another qualified steel company 
                described in the preceding sentence, but only if such 
                person and such other person bear a relationship to 
                each other specified in section 267(b).''.
            (2) Conforming amendments.--
                    (A) Paragraph (1) of section 35(c) of such Code is 
                amended by striking ``and'' at the end of subparagraph 
                (B), by striking the period at the end of subparagraph 
                (C) and inserting ``, and'', and by adding the 
                following new subparagraph:
                    ``(D) an eligible steel industry retiree.''.
                    (B) Paragraph (1) of section 35(d) of such Code is 
                amended--
                            (i) in subparagraph (A) by inserting ``, or 
                        the eligible steel industry retiree's,'' after 
                        ``taxpayer's'', and
                            (ii) in subparagraph (B) by inserting ``or 
                        the eligible steel industry retiree'' after 
                        ``taxpayer''.
    (d) Addition of Steel Retiree Health Benefits to Definition of 
Qualified Health Insurance.--Paragraph (1) of section 35(e) of such 
Code is amended by adding at the end the following new subparagraphs:
                    ``(K) Coverage under an employee benefit plan of a 
                qualified steel company or coverage funded by a steel 
                industry retiree benefits health trust.
                    ``(L) In the case of an eligible steel industry 
                retiree, coverage under a medicare supplemental policy 
                (as defined in section 1882(g)(1) of the Social 
                Security Act), Medicare+Choice plan (as defined in part 
                C of title XVIII of such Act), and similar plans.''.
    (e) Exception From Specified Coverage Rule for Steel Industry 
Retirees.--Subsection (f) of section 35 of such Code is amended by 
adding at the end the following flush sentence: ``Paragraph (2) shall 
not apply in the case of a credit under this section otherwise 
allowable to an eligible steel industry retiree and qualifying family 
members of such retiree.''.
    (f) Special Rule for Qualified Steel Company Payments to a Steel 
Industry Retiree Health Benefits Trust.--Subsection (g) of section 35 
of such Code, as amended by subsection (b), is further amended by 
adding at the end the following new paragraph:
            ``(10) Treatment of payments by a qualified steel company 
        to a steel industry retiree health benefits trust.--For 
        purposes of this section--
                    ``(A) In general.--Amounts paid by a qualified 
                steel company to a steel industry retiree health 
                benefits trust shall be treated as amounts paid for 
                qualifying coverage for purposes of subsection (a)(2) 
                (determined without regard to paragraph (9)).
                    ``(B) Steel industry retiree health benefits 
                trust.--The term `steel industry retiree health 
                benefits trust' means a trust established for the 
                purpose of paying health and death benefits to eligible 
                steel industry retirees and qualifying family members 
                either pursuant to section 501(c)(9) or in connection 
                with the acquisition by a qualified steel company of 
                another qualified steel company or of a substantial 
                portion of the assets of another qualified steel 
                company.''.
    (g) Other Conforming Amendments.--
            (1) Section 35(g)(1) of such Code is amended by striking 
        ``subsection (a)'' and inserting ``subsection (a)(1)''.
            (2) Section 35(g)(2) of such Code is amended by striking 
        ``162(l) or 213'' and inserting ``162(l), 213, or 419''.
    (h) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2003.