99–006

107TH CONGRESS REPORT " HOUSE OF REPRESENTATIVES ! 2d Session 107–647

COAL ACCOUNTABILITY AND RETIRED EMPLOYEE ACT FOR 

THE 21ST CENTURY

SEPTEMBER 9, 2002.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. HANSEN, from the Committee on Resources, 

submitted the following 

R E P O R T 

together with 

ADDITIONAL VIEWS 

[To accompany H.R. 3813] 

[Including cost estimate of the Congressional Budget Office]

The Committee on Resources, to whom was referred the bill 

(H.R. 3813) to modify requirements relating to allocation of interest 

that accrues to the Abandoned Mine Reclamation Fund, having 

considered the same, report favorably thereon without amendment 

and recommend that the bill do pass. 

PURPOSE OF THE BILL

The purpose of H.R. 3813 is to modify requirements relating to 

allocation of interest that accrues to the Abandoned Mine Reclamation Fund. 

BACKGROUND AND NEED FOR LEGISLATION

The Surface Mining Control & Reclamation Act of 1977 (Public 

Law 95–87; 30 U.S.C. 1201 et seq.) established an abandoned coal 

mine reclamation fund supported by a fee on domestically produced 

coal. Section 6002 of Public Law 101–508 provided for investing unappropriated abandoned mine land (AML) funds and unspent appropriated funds in U.S. Treasury bills. 

The Coal Act of 1992 created the United Mine Workers of America (UMWA) Combined Benefits Fund (CBF) to provide health benVerDate Sep 04 2002 06:50 Sep 10, 2002 Jkt 099006 PO 00000 Frm 00001 Fmt 6659 Sfmt 6601 E:\HR\OC\HR647.XXX HR647
2

efits by merging retiree benefit programs negotiated between the 

Bituminous Coal Operators Association (BCOA) and the UMWA in 

1950. The CBF is financed through premiums levied on companies 

and individuals signatory to BCOA–UMWA labor agreements. 

An ‘‘unassigned beneficiaries’’ class of retirees exists where no 

signatory company exists to pay their premiums. To finance these 

benefits, beginning in 1996, Congress provided that up to 100 percent of the interest collected on the AML fund in each fiscal year 

or $70 million, whichever is smaller, be transferred to the CBF 

(Section 19143 of Public Law 102–486). This law also authorized 

transfer to the CBF of the interest earned on AML money from 

1992 through 1996, if needed to finance net asset deficits exceeding 

the actual interest earned during the fiscal year, up to the $70 million cap. The transferred funds are not subject to appropriation and 

can only be used to provide benefits to unassigned beneficiaries. 

The House Committee on Ways and Means has jurisdiction over 

the finances of the CBF, but the Resources Committee must authorize transfers from the AML to the CBF. 

The number of unassigned beneficiaries has significantly increased due to several court decisions limiting signatory companies 

and bankruptcies. The effects of these factors combined with rising 

health care costs have created a financial crisis for the CBF. The 

problem has been temporarily solved by emergency appropriations 

from the unobligated interest balance earned on AML funds. 

H.R. 3813 would remove the $70 million cap on annual transfers 

of interest balances to the CBF. It would also remove the requirement that transferred funds must be used to provide benefits for 

the unassigned beneficiaries and allows interest transfers to be 

made to offset the amount of any deficits to the CBF to prevent reduction in health care coverage. 

COMMITTEE ACTION

H.R. 3813 was introduced on February 27, 2002, by Congressman 

Nick J. Rahall II (D–WV). The bill was referred to the Committee 

on Resources, and within the Committee to the Subcommittee on 

Energy and Mineral Resources. On June 26, 2002, the Full Committee met to consider the bill and by unanimous consent discharged the Subcommittee on Energy and Mineral Resources from 

further consideration of H.R. 3813. No amendments were offered 

and the bill was ordered favorably reported to the House of Representatives by unanimous consent. 

SECTION-BY-SECTION ANALYSIS

Section 1 provides that H.R. 3813 may be cited as the ‘‘Coal Accountability and Retired Employee Act for the 21st Century.’’

Section 2 authorizes the transfer of any interest received on unappropriated AML funds and unspent appropriated funds to the 

CBF in such amounts needed to offset the estimated deficit in net 

assets in the CBF. The effect of Section 2 is to remove the $70 million cap on annual transfers of interest balances to the CBF and 

the requirement that the transfers can only be used to offset deficits in the premium account for unassigned beneficiaries. 

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COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of rule XIII 

of the Rules of the House of Representatives, the Committee on Resources’ oversight findings and recommendations are reflected in 

the body of this report. 

CONSTITUTIONAL AUTHORITY STATEMENT

Article I, section 8 of the Constitution of the United States 

grants Congress the authority to enact this bill. 

COMPLIANCE WITH HOUSE RULE XIII

1. Cost of Legislation. Clause 3(d)(2) of rule XIII of the Rules of 

the House of Representatives requires an estimate and a comparison by the Committee of the costs which would be incurred in carrying out this bill. However, clause 3(d)(3)(B) of that rule provides 

that this requirement does not apply when the Committee has included in its report a timely submitted cost estimate of the bill prepared by the Director of the Congressional Budget Office under section 402 of the Congressional Budget Act of 1974. 

2. Congressional Budget Act. As required by clause 3(c)(2) of rule 

XIII of the Rules of the House of Representatives and section 

308(a) of the Congressional Budget Act of 1974, this bill does not 

contain any new budget authority, credit authority, or an increase 

or decrease in revenues or tax expenditures. According to the Congressional Budget Office, enactment of this bill would result in a 

net change in direct spending of $405 million over the 2004–2012 

time period. 

3. General Performance Goals and Objectives. As required by 

clause 3(c)(4) of rule XIII, the general performance goal or objective 

of this bill is to modify requirements relating to allocation of interest that accrues to the Abandoned Mine Reclamation Fund. 

4. Congressional Budget Office Cost Estimate. Under clause 

3(c)(3) of rule XIII of the Rules of the House of Representatives and 

section 403 of the Congressional Budget Act of 1974, the Committee has received the following cost estimate for this bill from the 

Director of the Congressional Budget Office:

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, September 5, 2002. 

Hon. JAMES V. HANSEN, Chairman, Committee on Resources, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 3813, the Coal Accountability and Retired Employee Act for the 21st Century. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Alexis Ahlstrom. 

Sincerely, 

STEVEN LIEBERMAN

(For Dan L. Crippen, Director). 

Enclosure. 

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H.R. 3813—Coal Accountability and Retired Employee Act for the 

21st Century 

Summary: H.R. 3813 would require the Office of Surface Mining 

to transfer any remaining interest credited to the Abandoned Mine 

Reclamation (AML) Fund to the United Mine Workers of America 

Combined Benefit Fund (CBF) in the case of a deficit of net assets 

in that fund (that is, when expenditures exceed revenues in a particular year). CBO estimates that the CBF will record a deficit of 

net assets in 2002 and in each year thereafter. If the bill were enacted, CBO estimates that an additional $71 

million in 2003 and about $500 million over the 2003–2012 period 

would be transferred to the CBF, assuming that the reclamation 

fees paid by coal companies to the AML Fund expire in 2004 as 

scheduled and that no discretionary appropriations are made from 

the fund after fiscal year 2002. By themselves, the transfers, from 

one federal budget account to another, would not affect the budget 

totals. The transfers would, however, provide additional resources 

to the CBF, which would otherwise run out of money to pay health 

benefits to retired mine workers and their dependents. CBO estimates that those transfers would result in additional benefit payments of $4 million in 2004 and $421 million over the 2004–2012 

period. 

In addition, because of the increased payments from the CBF, federal Medicaid spending would decline by about $2 million a year 

beginning in 2005. Therefore, CBO estimates that the net change 

in direct spending would be an increase of $405 million over the 

2004–2012 period. Because implementing H.R. 3813 would affect 

direct spending, pay-as-you-go procedures would apply. 

H.R. 3813 contains no private-sector or intergovernmental mandates as defined in the Unfunded Mandates Reform Act (UMRA) 

and would reduce Medicaid spending by state governments.

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 3813 is shown in Table 1. The costs of this 

legislation fall within budget function 550 (health).

By fiscal year, in millions of dollars—

2002 2003 2004 2005 2006 2007

CHANGES IN DIRECT SPENDING

Additional Spending from the CBF: 

Estimated Budget Authority ................................................ 0 0 4 63 60 58

Estimated Outlays ............................................................... 0 0 4 63 60 58

Federal Share of Medicaid: 

Estimated Budget Authority ................................................ 0 0 (*) ¥2 ¥2 ¥2

Estimated Outlays ............................................................... 0 0 (*) ¥2 ¥2 ¥2

Net Effect on Federal Spending: 

Estimated Budget Authority ................................................ 0 0 4 61 58 56

Estimated Outlays ............................................................... 0 0 4 61 58 56

Note.—*=Reduction of less than $500,000. 

Basis of estimate: The Abandoned Mine Reclamation Fund is 

supported by a fee on domestically produced coal, and a portion of 

the interest credited to that fund each year is transferred to the 

Combined Benefit Fund to provide health benefits for certain retired mine workers and their dependents. Under current law, the 

transfer of interest earnings is capped at $70 million a year. H.R. 

3813 would remove that cap and would allow interest transfers to 

be made to offset any deficits in the CBF. CBO estimates that the 

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CBF will run a deficit of more than $450 million over the 2003–

2012 period because the cost of providing health benefits has been 

growing more rapidly than the premiums collected by the fund. It 

the fill is enacted, CBO estimates that an additional $71 million 

would be transferred in 2003 to cover deficits in 2002 and 2003. 

Although the CBF is privately administered, revenues to the 

fund and outlays from the fund are recorded on the federal budget. 

The payments to the fund—health insurance premiums paid by 

certain coal producers—are mandated by the government, and the 

benefits paid by the fund are a federal entitlement program. Therefore, the transfer of funds from the AML to the CBF is an 

intragovernmental transaction and, by itself, has no net budgetary 

effect. 

The budgetary impact of H.R. 3813 would not be the transfer 

itself, but the additional benefits that would be paid from the CBF 

as a result of the transfer. In the event of a deficit, the trustees 

of the CBF will first try to balance the fund by reducing spending 

on items and services other than health benefits. But if the deficit 

is large enough, they will have to cut benefits. CBO estimates that 

the fund will have to reduce benefits starting in 2004 and will need 

to cut $421 million in benefits over the 2004–2012 period under 

current law—that is, with transfers limited to $70 million a year. 

This cost estimate assumes that no appropriations are made 

from the AML Fund after 2002, and that the fund receives no additional income after 2004 from taxes on companies producing coal. 

(Under current law, those taxes expire on September 30, 2004.) On 

that basis, CBO estimates that there would be enough interest 

available in the AML Fund to cover net deficits in the CBF so that 

no benefits would be cut through 2012 if H.R. 3813 were enacted. 

Thus, the transfer of interest from the AML Fund to cover net deficits in the CBF would enable the CBF to avoid reducing benefits, 

and therefore, would increase direct spending by $421 million over 

the 2004–2012 period. 

The result would be different if additional appropriations for 

other purposes were made from the AML Fund after 2002. If appropriations continue at current levels (without extensions of the 

taxes), the AML Fund would gradually be depleted and the sums 

available for transfer to the CBF would decline over time. After a 

few years, benefits payments would have to be reduced. Under that 

scenario, enactment of H.R. 3813 would not add to aggregate 

spending over the 2004–2012 period. 

For beneficiaries who are also enrolled in Medicaid, a loss of benefits from the CBF would shift costs to the Medicaid program. Because this legislation would eliminate the need to reduce health 

benefits paid from the CBF, it would reduce the health care costs 

that would have to be paid by Medicaid. CBO estimates that this 

change would decrease federal Medicaid spending by $2 million in 

2005 and $16 million over the 2005–2012 period. 

Pay-as-you-go considerations: Section 252 of the Balanced Budget 

and Emergency Deficit Control Act sets up pay-as-you-go procedures for legislation affecting direct spending or receipts. The net 

changes in outlays that are subject to pay-as-you-go procedures are 

shown in the following table. For the purposes of enforcing pay-asyou-go procedures, only the effects through 2006 are counted.

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By fiscal year, in millions of dollars—

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Changes in outlays ................................................... 0 0 4 61 58 56 53 50 45 41 36

Changes in receipts ................................................. Not applicable 

Intergovernmental and private-sector impact: This bill contains 

no new intergovernmental or private-sector mandates as defined in 

UMRA. Because additional resources in the Combined Benefit 

Fund would provide health benefits to eligible beneficiaries, Medicaid spending would decrease. Consequently, CBO estimates that 

states would save over $1 million in 2005 and $12 million over the 

2003–2012 period in the Medicaid program. 

Estimate prepared By: Federal Costs: AML and CBF Funds—

Alexis Ahlstrom, Medicaid—Eric Rollings, Impact on State, Local, 

and Tribal Governments: Leo Lex; and Impact on the Private Sector: Lauren Marks. 

Estimate approved by: Robert A. Sunshine, Assistant Director for 

Budget Analysis. 

COMPLIANCE WITH PUBLIC LAW 104–4

This bill contains no unfunded mandates. 

PREEMPTION OF STATE, LOCAL OR TRIBAL LAW

This bill is not intended to preempt any State, local or tribal law. 

CHANGES IN EXISTING LAW

If enacted, this bill would make no changes to existing law.

(7)

ADDITIONAL VIEWS OF HON. NICK RAHALL 

The purpose of this legislation is to restore our Nation’s historic 

commitment to insuring lifetime health care for retired coal miners. At the outset, I would note that joining me as a sponsor of 

H.R. 3813 is the distinguished gentleman from Ohio, Bob Ney. 

Enactment this year of CARE 21, the ‘‘Coal Accountability and 

Retired Employee Act for the 21st Century,’’ is necessary if we are 

to avoid seeing a curtailment in health care coverage for thousands 

of retired coal miners and their widows. Indeed, this would not be 

the first time that Congress has acted in this matter. In 1992, in 

what is known as the ‘‘Coal Act’’ enacted as part of the Energy Policy Act, Congress established the UMWA Combined Benefit Funds 

(CBF) combining the union’s 1950 and 1974 benefit plans. This action came in response to changes in the coal industry which created 

a large class of ‘orphaned’ miners whose benefits were no longer 

being paid by an active coal company. A key feature of the Coal Act 

was the financing of orphaned miner health care costs through an 

annual transfer of a portion of the interest which accrues to the unappropriated balance in the Abandoned Mine Reclamation Fund. 

Simply put, in restoring abandoned coal mine lands we must not 

abandon the retired coal miner. 

The Coal Act was working well, health care for retirees whose 

former employers could be identified would be financed by premiums paid by those companies while providing for a transfer of 

reclamation fund interest to finance orphaned miner care. 

However, a barrage of litigation and adverse court decisions once 

again is threatening the financial integrity of the program. Among 

them, what is known as the ‘‘Chater’’ decision which overturned 

the Social Security Administration’s premium determination reducing premiums by 10 percent. Another court decision ordered the 

CBF to refund about $40 million in contributions. And the Supreme Court has rendered two especially harsh decisions; in the 

Eastern Enterprise case adding some 8,000 retirees to the orphaned miner rolls and just last week ruling that successor companies to signatories of the national wage agreement are not responsible to continue paying premiums for former employees. The result: Without a new source of funds, the CBF will face a cash shortage most likely beginning at the end of this year which could force 

curtailments in health care coverage for some 50,000 retirees and 

widows whose average age is 78. 

CARE 21 takes a relatively simple and straightforward approach 

to addressing this impending crisis: It would lift the restriction in 

current law that reclamation fund interest can only be used for orphaned miner health care. Rather, it would allow AML interest 

transfers to be made for the purpose of offsetting any deficit in net 

assets in the CBF. 

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I would note that interest accrues to the Abandoned Mine Reclamation Fund at a rate of, for example, $103 million last fiscal 

year. Meanwhile, there is a $1.8 billion unappropriated balance in 

the Fund. CARE 21 in no way adversely affects the abandoned 

mine reclamation program. The principal remains intact for that 

effort, and is fueled by annual reclamation fees assessed on every 

ton of mined coal which finances the program. 

As such, one of the key features of CARE 21 is that the general 

taxpayer is not being called upon to pay for retired coal miner 

health care, but rather, the coal industry itself would provide for 

this coverage through the interest which accrues to the fees it pays 

into the Abandoned Mine Reclamation Fund. 

Earlier, I noted there is a historical commitment to providing 

health care for retired coal miners. This is a unique situation in 

that what would normally be a matter solely for the private sector 

is not in this instance. The genesis for this situation dates back to 

1946 in an agreement between then-UMW President John L. Lewis 

and the federal government to resolve a long-running labor dispute. 

At the time, President Truman had ordered the Interior Secretary 

to take possession of all bituminous coal mines in the country in 

an effort to break a United Mine Workers of America strike. Eventually, Lewis and Secretary Julius Krug reached an agreement that 

included an industry-wide, miner controlled health plan. 

In fact, the 1992 Coal Act itself was formulated partly on the 

basis of recommendations from the Coal Commission, established 

by former labor Secretary Libby Dole, which in 1990 recommended 

a statutory obligation to help finance the UMWA’s Health Benefit 

Funds. 

The people covered by this health care program spent their careers producing the energy which powered this Nation to greatness. 

We must not forsake them. We must not cast them adrift in their 

later years, robbed of the health care they so desperately need.

NICK RAHALL.

Æ