I

103D CONGRESS

1ST SESSION H. R. 1443

To amend the Internal Revenue Code of 1986 to provide a tax credit to

businesses which mine metallurgical coal and are required to make contributions to the UMWA Combined Benefit Fund created by the Energy

Policy Act of 1992.

IN THE HOUSE OF REPRESENTATIVES

MARCH 24, 1993

Mr. BOUCHER (for himself, Mr. PAYNE of Virginia, Mr. SISISKY, Mr. BLILEY,

Mr. PICKETT, Mrs. BYRNE, Mr. MORAN, Mr. GOODLATTE, Mr. GILLMOR,

and Ms. KAPTUR) 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

a tax credit to businesses which mine metallurgical coal

and are required to make contributions to the UMWA

Combined Benefit Fund created by the Energy Policy

Act of 1992.

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

3 SECTION 1. METALLURGICAL COAL MINING CREDIT.

4 (a) GENERAL RULE.—Subpart D of part IV of sub5 chapter A of chapter 1 of the Internal Revenue Code of
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1 1986 (relating to business related credits) is amended by

2 adding at the end thereof the following new section:

3 ‘‘SEC. 45A. METALLURGICAL COAL MINING CREDIT.

4 ‘‘(a) GENERAL RULE.—For purposes of section 38,

5 the metallurgical coal mining credit determined under this

6 section for the taxable year is the lesser of—

7 ‘‘(1) the applicable percentage of the aggregate

8 amount of the premiums paid or accrued by the tax9 payer during the taxable year pursuant to chapter

10 99 of this title (relating to coal industry health bene11 fits), or

12 ‘‘(2) 7.5 percent of the aggregate gross revenue

13 from the sale of qualified metallurgical coal sold by

14 the taxpayer during the taxable year to an unrelated

15 person.

16 ‘‘(b) QUALIFICATION.—No credit shall be determined

17 under subsection (a) with respect to any taxpayer unless

18 at least 20 percent of the total tons of qualified coal sold

19 by the taxpayer during each of the 4 preceding taxable

20 years was qualified metallurgical coal. For purposes of the

21 preceding sentence, only coal produced from an economic

22 interest held by the taxpayer shall be taken into account.

23 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur24 poses of this section—
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1 ‘‘(1) APPLICABLE PERCENTAGE.—The applica2 ble percentage is the percentage of the aggregate

3 tons of qualified coal sold by the taxpayer during the

4 taxable year to unrelated persons which consists of

5 qualified metallurgical coal. In no event shall the ap6 plicable percentage exceed 75 percent.

7 ‘‘(2) QUALIFIED METALLURGICAL COAL.—The

8 term ‘qualified metallurgical coal’ means any bitu9 minous coal which—

10 ‘‘(A) is used in the production of iron and

11 steel, and

12 ‘‘(B) is processed by, or produced from an

13 economic interest held by, a signatory operator.

14 ‘‘(3) UNRELATED PERSON.—The term ‘unre15 lated person’ has the same meaning as when used in

16 section 29.

17 ‘‘(4) AFFILIATED GROUPS.—All members of the

18 same affiliated group (as defined in section 1504)

19 shall be treated as one taxpayer for purposes of this

20 section and the credit determined under subsection

21 (a) with respect to such one taxpayer shall be allo22 cated among such members in such manner as the

23 Secretary may prescribe.
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1 ‘‘(5) ECONOMIC INTEREST.—The term ‘eco2 nomic interest’ means an interest with respect to

3 which an allowance for depletion is allowable.

4 ‘‘(6) BITUMINOUS COAL.—The term ‘bitu5 minous coal’ means coal classified as bituminous

6 coal according to the publication of the American

7 Society for Testing and Materials under the title

8 ‘Standard Classification of Coals by Rank’ (ASTM

9 D 338–91A), as in effect on the date of the enact10 ment of chapter 99.

11 ‘‘(7) QUALIFIED COAL.—The term ‘qualified

12 coal’ means any bituminous coal which is produced

13 and processed by a signatory operator from an eco14 nomic interest held by a signatory operator.

15 ‘‘(8) SIGNATORY OPERATOR.—The term ‘signa16 tory operator’ has the meaning given such term by

17 section 9701(c)(1), and shall include all members of

18 the affiliated group of which such signatory operator

19 is a member that are also signatory operators.

20 ‘‘(9) TON.—The term ‘ton’ means 2,000

21 pounds.’’

22 (b) CREDIT MADE PART OF GENERAL BUSINESS

23 CREDIT.—Subsection (b) of section 38 is amended by

24 striking ‘‘plus’’ at the end of paragraph (7), by striking

25 the period at the end of paragraph (8) and inserting
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1 ‘‘, plus’’, and by adding at the end thereof the following

2 new paragraph:

3 ‘‘(9) the metallurgical coal credit determined

4 under section 45A.’’

5 (c) CREDIT MAY OFFSET 90 PERCENT OF MINIMUM

6 TAX.—Subsection (c) of section 38 of such Code is amend7 ed by redesignating paragraph (2) as paragraph (3) and

8 by inserting after paragraph (1) the following new para9 graph:

10 ‘‘(2) METALLURGICAL COAL CREDIT MAY OFF11 SET 90 PERCENT OF MINIMUM TAX.—

12 ‘‘(A) IN GENERAL.—In the case of a tax13 payer entitled to a credit determined under sec14 tion 45A, the amount determined under para15 graph (1)(A) shall be reduced by the lesser of—

16 ‘‘(i) the portion of the metallurgical

17 coal credit not used against the normal

18 limitation, or

19 ‘‘(ii) 90 percent of the taxpayer’s ten20 tative minimum tax for the taxable year.

21 ‘‘(B) PORTION OF METALLURGICAL COAL

22 CREDIT NOT USED AGAINST NORMAL LIMITA23 TION.—For purposes of subparagraph (A) the

24 portion of the metallurgical coal credit not used
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1 against the normal limitation is the excess (if

2 any) of—

3 ‘‘(i) the portion of the credit under

4 subsection (a) which is attributable to the

5 metallurgical coal credit determined under

6 section 45A, over

7 ‘‘(ii) the limitation of paragraph (1)

8 (determined without regard to this para9 graph) reduced by the portion of the credit

10 under subsection (a) which is not so attrib11 utable.’’

12 (d) CLERICAL AMENDMENT.—The table of sections

13 for subpart D of part IV of subchapter A of chapter 1

14 of such Code is amended by adding at the end thereof

15 the following new item:

‘‘Sec. 45A. Metallurgical coal mining credit.’’

16 (e) EFFECTIVE DATE.—The amendments made by

17 this section shall take effect on January 1, 1993.

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