DESCRIPTION OF THE CHAIRMAN'S MARK OF THE

“RETIRED COAL MINERS HEALTH BENEFIT SECURITY ACT”

Scheduled for Markup

by the

SENATE COMMITTEE ON FINANCE

on September 7, 2000

Prepared by the Staff

of the

JOINT COMMITTEE ON TAXATION

September 5, 2000

JCX-90-00
(i)

CONTENTS

Page

I. INTRODUCTION .................................................. 1

II. DESCRIPTION OF THE RETIRED COAL MINERS HEALTH BENEFIT

SECURITY ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1

 This document may be cited as follows: Joint Committee on Taxation, Description of

the Chairman's Mark of the “Retired Coal Miners Health Benefit Security Act” (JCX-90-00),

September 5, 2000.

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I. INTRODUCTION

This document,1

 prepared by the staff of the Joint Committee on Taxation, provides a

description of the Chairman's mark of an original bill, the “Retired Coal Miners Health Benefit

Security Act” scheduled for markup by the Senate Committee on Finance on September 7, 2000.
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II. DESCRIPTION OF THE

RETIRED COAL MINERS HEALTH BENEFIT SECURITY ACT

Present Law

The United Mine Workers of America (“UMWA”) Combined Benefit Fund was

established by the Coal Industry Retiree Health Benefit Act of 1992 (“Coal Act”) to assume

responsibility of payments for medical care expenses of retired miners and their dependents who

were eligible for health care from the private 1950 and 1974 UMWA Benefit Plans. The

Combined Benefit Fund is financed by assessments on current and former signatories to labor

agreements with the UMWA, past transfers from an overfunded United Mine Workers pension

fund, and transfers from the Abandoned Mine Land reclamation fund (“AML Fund”). Pursuant

to the Coal Act, the Social Security Administration is responsible for assigning eligible retired

miners and their dependents to current and former signatories to labor agreements with UMWA

and calculating annual contributions to be paid by each such signatory for each beneficiary

assigned to the signatory.

In April 1996, the United States Court of Appeals for the 11th Circuit affirmed an

Alabama Federal district court ruling in National Coal Association v. Chater that the Social

Security Administration had improperly construed the Coal Act when it calculated contributions

owed to the Combined Benefit Fund. The court directed that future contributions be recalculated

to reflect Medicare reimbursements obtained by the Combined Benefit Fund from the Health

Care Financing Administration (“HCFA”), resulting in approximately a 10 percent reduction in

contribution for each beneficiary assigned to a coal company under the Coal Act.

In March 1999, the United States Court of Appeals for the 6th Circuit ruled in Dixie Fuel

Company v. Commissioner of Social Security that, because the Coal Act required the Social

Security Administration to assign each beneficiary to a current or former signatory coal operator

prior to October 1, 1993, and that any assignments of beneficiaries after September 30, 1993,

were invalid.

Interest from fees collected by the AML Fund are used to pay contributions to the

Combined Benefit Fund for beneficiaries who are not assigned to a coal company. The

authorization of the AML Fund to collect fees will expire on September 30, 2004.

Description of Proposal

The proposal would provide for annual transfers of general revenue to the Combined

Benefit Fund, as follows: $40 million for fiscal year 2001, $46 million for fiscal year 2002, $47

million for each of fiscal years 2003 through 2007, $45 million for each of fiscal years 2008 and

2009, and $44 million for fiscal year 2010. The proposal would also reverse the effects of the

court decision in National Coal Association v. Chater by providing that contributions to the

Combined Benefit Fund would be calculated without reflecting Medicare reimbursements
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obtained by the Combined Benefit Fund from HCFA. In addition, the proposal would amend the

Internal Revenue Code to eliminate the October 1, 1993, deadline for the assignment of

beneficiaries. Furthermore, the proposal would extend the authorization of the AML Fund to

collect fees through September 30, 2010.

Effective Date

The proposal generally would be effective on the date of enactment. The portion of the

proposal relating to the calculation of contributions to the Combined Benefit Fund would be

effective for fiscal years beginning on or after October 1, 2000, and the authority to assign

beneficiaries would be effective as if included in the Coal Act.