I

104TH CONGRESS

1ST SESSION H. R. 2410

To amend the Internal Revenue Code of 1986 to provide reductions in

required contributions to the United Mine Workers of America Combined

Benefit Fund, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 27, 1995

Mr. MURTHA introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to provide

reductions in required contributions to the United Mine

Workers of America Combined Benefit Fund, and for

other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Small Non-Coal Pro5 ducing Company Relief Act’’.
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1 SEC. 2. REDUCTION IN CONTRIBUTIONS OF CERTAIN PER2 SONS TO COAL MINERS COMBINED BENEFIT

3 FUND.

4 (a) IN GENERAL.—Part II of subchapter B of chap5 ter 99 of the Internal Revenue Code of 1986 (relating to

6 financing of Combined Benefit Fund) is amended by in7 serting after section 9704 the following new section:

8 ‘‘SEC. 9704A. REDUCTIONS IN ANNUAL PREMIUMS OF CER9 TAIN ASSIGNED OPERATORS.

10 ‘‘(a) GENERAL RULE.—The annual premium of an

11 assigned operator under section 9704(a) shall—

12 ‘‘(1) in the case of an eligible small assigned

13 operator, be reduced as provided in subsection (b),

14 and

15 ‘‘(2) in any case in which there is a surplus in

16 the Combined Fund to which subsection (c) applies,

17 be reduced as provided in subsection (c).

18 ‘‘(b) REDUCTIONS FOR ELIGIBLE SMALL ASSIGNED

19 OPERATORS.—

20 ‘‘(1) IN GENERAL.—If this subsection applies to

21 an eligible small assigned operator for any plan year

22 of the Combined Fund, the annual premium under

23 section 9704(a) for such operator for such plan year

24 shall not exceed 5 percent of the operator’s average

25 annual taxable income for purposes of chapter 1 for

26 the 5-taxable year period ending with the operator’s
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1 most recent taxable year ending before the beginning

2 of the plan year.

3 ‘‘(2) YEARS TO WHICH SUBSECTION APPLIES.—

4 ‘‘(A) IN GENERAL.—This subsection shall

5 apply to any plan year of the Combined Fund—

6 ‘‘(i) which begins before October 1,

7 1998,

8 ‘‘(ii) which begins after September 30,

9 1998, and before October 1, 2003, but

10 only if the Combined Fund has a surplus

11 as of the close of the plan year ending Sep12 tember 30, 1998, equal to or greater than

13 $150,000,000, or

14 ‘‘(iii) which begins after September

15 30, 2003, but only if the Combined Fund

16 has a surplus as of the close of the plan

17 year ending September 30, 2003, equal to

18 or greater than $100,000,000.

19 ‘‘(B) COORDINATION WITH SURPLUS RE20 DUCTIONS.—This subsection shall not apply to

21 any eligible small assigned operator for any

22 plan year for which no annual premium is im23 posed on such operator by reason of subsection

24 (c).
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1 ‘‘(3) ELIGIBLE SMALL ASSIGNED OPERATORS.—

2 For purposes of this section—

3 ‘‘(A) IN GENERAL.—The term ‘eligible

4 small assigned operator’ means any assigned

5 operator—

6 ‘‘(i) the average annual gross income

7 of which for purposes of chapter 1 for the

8 5-taxable year period ending with the oper9 ator’s most recent taxable year ending be10 fore October 1, 1993, did not exceed

11 $25,000,000, and

12 ‘‘(ii) which is not engaged in the pro13 duction of coal for the plan year for which

14 the determination is being made.

15 For purposes of this subparagraph, production

16 by a related person shall be treated as produc17 tion by the assigned operator.

18 ‘‘(B) PRODUCTION OF COAL.—For pur19 poses of subparagraph (A), an assigned opera20 tor or related person shall be treated as en21 gaged in the production of coal if it has em22 ployed employees in—

23 ‘‘(i) the extraction of coal, or

24 ‘‘(ii) the preparation, processing, or

25 changing of coal for sale.
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1 ‘‘(4) AGGREGATION RULES.—In determining

2 gross income or taxable income for purposes of this

3 section, an assigned operator and any related per4 sons shall be treated as 1 person.

5 ‘‘(c) REDUCTIONS BASED UPON FUND SURPLUS.—

6 ‘‘(1) ASSIGNED OPERATORS.—If, as of the close

7 of any plan year ending after September 30, 1997,

8 the Combined Fund has a surplus equal to or great9 er than 50 percent of the net expenses of the Com10 bined Fund for the plan year, no annual premium

11 shall be imposed under section 9704(a) on any eligi12 ble small assigned operator for the succeeding plan

13 year.

14 ‘‘(2) OTHER OPERATORS.—If, as of the close of

15 any plan year ending after September 30, 1997, the

16 Combined Fund has a surplus equal to or greater

17 than 100 percent of the net expenses of the Com18 bined Fund for the plan year, the annual premium

19 under section 9704(a) for the succeeding plan year

20 of any assigned operator other than an eligible small

21 assigned operator shall be reduced by an amount

22 which bears the same ratio to the surplus in excess

23 of 100 percent of the net expenses of the Combined

24 Fund for the plan year as—
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1 ‘‘(A) such assigned operator’s applicable

2 percentage (expressed as a whole number),

3 bears to

4 ‘‘(B) the sum of the applicable percentages

5 (expressed as whole numbers) of all assigned

6 operators other than eligible small assigned op7 erators.

8 ‘‘(d) OVERALL LIMITATION.—

9 ‘‘(1) IN GENERAL.—In no event shall the total

10 reductions in annual premiums payable to the Com11 bined Fund under this section for any plan year ex12 ceed $5,000,000.

13 ‘‘(2) CALCULATION OF REDUCTIONS.—For pur14 poses of paragraph (1), the total reductions in an15 nual premiums for any plan year shall not include

16 any reductions under this section in premiums pay17 able by an eligible small assigned operator who,

18 prior to the date of the enactment of this section,

19 has not paid at least 50 percent of the premiums as20 sessed such assigned operator for the period October

21 1, 1994, through June 30, 1995.

22 ‘‘(3) ORDERING RULE.—Any decrease in pre23 mium reductions under this section for any plan

24 year by reason of paragraph (1) shall be applied

25 first against the reductions under subsection (b) and
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1 then against reductions under subsection (c). Any

2 such decreases shall be made ratably among opera3 tors.

4 ‘‘(e) COMPUTATION OF SURPLUS.—For purposes of

5 this section, any determination of a surplus in the Com6 bined Fund—

7 ‘‘(1) shall be calculated on an accrual basis,

8 ‘‘(2) shall be made and certified by an inde9 pendent auditor retained by the trustees, and

10 ‘‘(3) once so certified, shall be reviewable by a

11 court of law only to determine if such determination

12 is reasonable.

13 A determination shall be considered reasonable for pur14 poses of paragraph (3) if it is made in accordance with

15 generally accepted accounting principles and is based on

16 assumptions which, in the aggregate, are reasonable.’’

17 (b) CONFORMING AMENDMENT.—The table of sec18 tions for part II of subchapter B of chapter 99 of the In19 ternal Revenue Code of 1986 is amended by inserting

20 after the item relating to section 9704 the following new

21 item:

‘‘Sec. 9704A. Reductions in annual premiums of certain assigned operators.’’

22 (c) EFFECTIVE DATE.—The amendments made by

23 this section shall apply to plan years beginning after Janu24 ary 31, 1993.
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1 SEC. 3. WAIVER OF PENALTIES.

2 (a) IN GENERAL.—In the case of an eligible small

3 assigned operator (as defined in section 9704A(b)(3) of

4 the Internal Revenue Code of 1986, as added by section

5 1), no penalty shall be imposed under section 9707 of such

6 Code on any failure of such operator to pay any install7 ment of a premium due under section 9704 of such Code

8 before January 1, 1996, if the operator pays such install9 ment before such date. For purposes of this subsection,

10 the amount of the installment shall be determined after

11 application of the amendments made by section 1.

12 (b) COMPLIANCE.—An operator shall not be treated

13 as failing to meet the requirements of subsection (a) with

14 respect to any installment if—

15 (1) the failure to pay the installment before

16 January 1, 1996, was due to reasonable cause and

17 not to willful neglect, and

18 (2) the failure is corrected within 90 days of

19 the later of—

20 (A) notice of the failure, or

21 (B) a final administrative or judicial deter22 mination of the amount of the installment

23 which is not reviewable or appealable.

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