II

104TH CONGRESS

1ST SESSION S. 878

To amend the Internal Revenue Code of 1986 to reduce mandatory premiums

to the United Mine Workers of America Combined Benefit Fund by

certain surplus amounts in the Fund, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MAY 26 (legislative day, MAY 15), 1995

Mr. COCHRAN (for himself, Mr. LOTT, Mr. WARNER, Mr. MCCONNELL, Mr.

SANTORUM, Mr. ABRAHAM, Mr. D’AMATO, Mr. BOND, Mr. PRESSLER,

Mr. DEWINE, Mr. KYL, Mrs. KASSEBAUM, and Mrs. HUTCHISON) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to reduce

mandatory premiums to the United Mine Workers of

America Combined Benefit Fund by certain surplus

amounts in the 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. REDUCTION IN REQUIRED PREMIUMS TO COM4 BINED FUND BY EXCESS SURPLUS IN FUND.

5 (a) IN GENERAL.—Paragraph (3) of section 9704(e)

6 of the Internal Revenue Code of 1986 (relating to short7 falls and surpluses) is amended to read as follows:
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1 ‘‘(3) SHORTFALLS AND SURPLUSES.—

2 ‘‘(A) DETERMINATIONS.—

3 ‘‘(i) IN GENERAL.—Subject to the

4 provisions of clause (iv), the trustees of the

5 Combined Fund shall, as of the close of

6 each plan year beginning on or after Octo7 ber 1, 1993—

8 ‘‘(I) determine any shortfall or

9 surplus in any premium account es10 tablished under paragraph (1) and, to

11 the maximum extent possible, reduce

12 or eliminate any shortfall in any such

13 account by transferring amounts to it

14 from any surplus in any other such

15 account, and

16 ‘‘(II) determine, after any trans17 fers under subclause (I), the aggre18 gate shortfall or surplus in the Com19 bined Fund, taking into account all

20 receipts of any kind during the plan

21 year from all sources.

22 ‘‘(ii) DETERMINATIONS MADE ON

23 CASH FLOW BASIS.—

24 ‘‘(I) IN GENERAL.—Subject to

25 the provisions of subclause (II) and
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1 clause (iii), any determination under

2 clause (i) for any plan year shall be

3 determined under the cash receipts

4 and disbursements method of account5 ing, taking into account only receipts

6 and disbursements for the plan year.

7 ‘‘(II) CERTAIN PRIOR YEAR SUR8 PLUSES.—For purposes of applying

9 subclause (I) for any plan year, any

10 surplus determined under subpara11 graph (A)(i)(II) as of the close of the

12 preceding plan year, including any

13 portion used as provided in subpara14 graph (B), shall be treated as received

15 in the Combined Fund as of the be16 ginning of the plan year.

17 ‘‘(iii) DISREGARD OF TRANSFERRED

18 AMOUNTS.—For purposes of this subpara19 graph—

20 ‘‘(I) no amount transferred to

21 the Combined Fund under section

22 9705, and no disbursements made

23 from such amount, shall be taken into

24 account in making any determination

25 under subparagraph (A) for the plan
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1 year of the transfer or any subsequent

2 plan year, and

3 ‘‘(II) any amount in a premium

4 account which was transferred to the

5 Combined Fund under section 9705

6 may not be transferred to another ac7 count under clause (i)(I).

8 ‘‘(iv) SPECIAL RULE FOR 1994.—In

9 the case of the plan year ending September

10 30, 1994, the determinations under sub11 paragraph (A) shall be made for the period

12 beginning February 1, 1993, and ending

13 September 30, 1994.

14 ‘‘(B) TREATMENT OF SURPLUS.—

15 ‘‘(i) NONPREMIUM ADJUSTMENTS.—

16 Any surplus determined under subpara17 graph (A)(i)(II) for any plan year shall be

18 used first for purposes of the carryover

19 under section 9703(b)(2)(C), but only to

20 the extent the amount of such carryover

21 does not exceed 10 percent of the benefits

22 and administrative costs paid by the Com23 bined Fund during the plan year (deter24 mined without regard to benefits paid from

25 transfers under section 9705).
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1 ‘‘(ii) PREMIUM ADJUSTMENTS.—The

2 annual premium for any plan year for each

3 assigned operator which is not a 1988

4 agreement operator shall be reduced by an

5 amount which bears the same ratio to the

6 surplus determined under subparagraph

7 (A)(i)(II) for the preceding plan year (re8 duced as provided under clause (i)) as—

9 ‘‘(I) such assigned operator’s ap10 plicable percentage (expressed as a

11 whole number), bears to

12 ‘‘(II) the sum of the applicable

13 percentages (expressed as whole num14 bers) of all assigned operators which

15 are not 1988 agreement operators.

16 The reduction in any annual premium

17 under this clause shall be allocated to the

18 premium accounts established under para19 graph (1) in the same manner as the an20 nual premium would have been allocated

21 without regard to this clause, and in the

22 case of assigned operators which sought

23 protection under title 11 of the United

24 States Code before October 24, 1992, with25 out regard to section 9706(b)(1)(A).
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1 ‘‘(C) SHORTFALLS.—If a shortfall is deter2 mined under subparagraph (A)(i)(II) for any

3 plan year, the annual premium for each as4 signed operator shall be increased by an

5 amount equal to such assigned operator’s appli6 cable percentage of the shortfall. Any increase

7 under this subparagraph shall be allocated to

8 each premium account with a shortfall.

9 ‘‘(D) NO AUTHORITY FOR INCREASE.—

10 Nothing in this paragraph shall be construed to

11 allow expenditures for health care benefits in

12 any plan year in excess of the limit under sec13 tion 9703(b)(2).

14 ‘‘(E) SPECIAL RULE FOR 1995.—In the

15 case of the plan year beginning October 1,

16 1994, the adjustment under subparagraph (B)

17 shall be made effective as of such date and any

18 assigned operator which receives a reduction in

19 premiums under subparagraph (B) shall be en20 titled to a credit to the extent it has paid, tak21 ing the reduction into account, excessive pre22 miums during plan year.’’

23 (b) AMOUNT OF PER BENEFICIARY PREMIUM.—

24 Paragraph (2) of section 9704(b) of the Internal Revenue
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1 Code of 1986 (defining per beneficiary premium) is

2 amended—

3 (1) by striking subparagraph (A) and inserting:

4 ‘‘(A) $2,116.67, plus’’, and

5 (2) by striking ‘‘the amount determined under

6 subparagraph (A)’’ in subparagraph (B) and insert7 ing ‘‘$2,116.67,’’.

8 (c) CONFORMING AMENDMENT.—Clause (ii) of sec9 tion 9703(b)(2)(A) of the Internal Revenue Code of 1986

10 is amended by inserting ‘‘(without regard to any reduction

11 under section 9704(e)(3)(B)(ii))’’ after ‘‘for the plan

12 year’’.

13 SEC. 2. DISCLOSURE REQUIREMENTS.

14 (a) IN GENERAL.—Section 9704(h) of the Internal

15 Revenue Code of 1986 (relating to information) is amend16 ed by adding at the end the following new paragraph:

17 ‘‘(2) INFORMATION TO CONTRIBUTORS.—

18 ‘‘(A) IN GENERAL.—The trustees of the

19 Combined Fund shall, within 30 days of a writ20 ten request, make available to any person re21 quired to make contributions to the Combined

22 Fund or their agent—

23 ‘‘(i) all documents which reflect its fi24 nancial and operational status, including

25 documents under which it is operated, and
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1 ‘‘(ii) all documents prepared at the re2 quest of the trustees or staff of the Com3 bined Fund which form the basis for any

4 of its actions or reports, including the eli5 gibility of participants in predecessor

6 plans.

7 ‘‘(B) FEES.—The trustees may charge rea8 sonable fees (not in excess of actual expenses)

9 for providing documents under this paragraph.’’

10 (b) CONFORMING AMENDMENT.—Section 9704(h) of

11 the Internal Revenue Code of 1986 is amended by striking

12 ‘‘(h) INFORMATION.—The’’ and inserting:

13 ‘‘(h) INFORMATION.—

14 ‘‘(1) INFORMATION TO SECRETARY.—The’’.

Æ