II 

108TH CONGRESS 

2D SESSION S. 2366

To resolve the structural indebtedness of the Black Lung Disability Trust 

Fund and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 29, 2004

Mr. GRASSLEY (by request) introduced the following bill; which was read twice 

and referred to the Committee on Finance 

A BILL

To resolve the structural indebtedness of the Black Lung 

Disability Trust 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 ‘‘Black Lung Disability 

5 Trust Fund Debt Restructuring Act’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) The Black Lung Disability Trust Fund (in 

9 this Act referred to as the ‘‘Trust Fund’’) was cre10 ated in 1978 as part of the Black Lung Benefits 
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1 Revenue Act of 1977, with the goal of shifting, from 

2 the Federal Government to the coal mining industry, 

3 the cost of compensating victims of occupational 

4 black lung disease. 

5 (2) The Trust Fund draws its principal revenue 

6 from excise taxes on coal. The Black Lung Benefits 

7 Revenue Act of 1977 authorized repayable advances 

8 from the Treasury to the Trust Fund, in such sums 

9 as may be necessary to make benefit payments and 

10 other authorized expenditures. Any such advances 

11 are required to be repaid, with interest at the rate 

12 prescribed in section 9501(c)(3) of the Internal Rev13 enue Code of 1986 to the general fund of the Treas14 ury when the Secretary of the Treasury determines 

15 that monies are available in the Trust Fund for such 

16 purposes. 

17 (3) In each year prior to 1990, the Trust Fund 

18 revenues were insufficient to satisfy all benefit pay19 ments and other authorized expenditures, resulting 

20 in the need for repayable advances from the Treas21 ury to the Trust Fund. 

22 (4) Since 1990, the Trust Fund revenues from 

23 excise taxes on coal have generally been sufficient to 

24 cover current benefit payments and administrative 

25 costs, but have not been sufficient to repay any por-
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1 tion of the outstanding principal that the Trust 

2 Fund owes to the Treasury. Instead, that indebted3 ness has grown each year as additional advances 

4 were taken to pay the portion of the interest charges 

5 not covered by the Trust Fund’s revenues. 

6 (5) Beginning in 1998, the annual interest 

7 charges on the debt alone have exceeded benefit pay8 ments made by the Trust Fund. 

9 (6) The annual interest charges to the Trust 

10 Fund now exceed its total annual excise tax reve11 nues. 

12 (7) Without action, the Trust Fund’s indebted13 ness to the Treasury, which totals approximately 

14 $8,200,000,000, will continue to grow and the Trust 

15 Fund will never become solvent, even when benefit 

16 outlays have declined to a level approaching zero. 

17 (8) It is in the public interest to refinance the 

18 Trust Fund debt and to restore long-term fiscal sol19 vency to the Trust Fund. 

20 SEC. 3. DEFINITIONS. 

21 For purposes of this Act: 

22 (1) REPAYABLE ADVANCE.—The term ‘‘repay23 able advance’’ means an amount that has been ap24 propriated to the Trust Fund in order to make ben25 efit payments and other expenditures that are au-
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1 thorized under section 9501 of the Internal Revenue 

2 Code of 1986 and are required to be repaid when 

3 the Secretary of the Treasury determines that mon4 ies are available in the Trust Fund for this purpose. 

5 (2) MARKET VALUE OF THE OUTSTANDING RE6 PAYABLE ADVANCES, PLUS ACCRUED INTEREST.—

7 The term ‘‘market value of the outstanding repay8 able advances, plus accrued interest’’ means the 

9 present value (determined by the Secretary of the 

10 Treasury as of the refinancing date and using the 

11 Treasury rate as the discount rate) of the stream of 

12 principal and interest payments derived assuming 

13 that each repayable advance that is outstanding on 

14 the refinancing date is due on the thirtieth anniver15 sary of the end of the fiscal year in which the ad16 vance was made to the Trust Fund, and that all 

17 such principal and interest payments are made on 

18 September 30 of the applicable fiscal year. 

19 (3) REFINANCING DATE.—The term ‘‘refi20 nancing date’’ means the date occurring 2 days after 

21 the date of the enactment of this Act. 

22 (4) TREASURY 1-YEAR RATE.—The term 

23 ‘‘Treasury 1-year rate’’ means a rate determined by 

24 the Secretary of the Treasury, taking into consider25 ation current market yields on outstanding market-
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1 able obligations of the United States with remaining 

2 periods to maturity of approximately 1 year, to have 

3 been in effect as of the close of business 1 business 

4 day before the date on which the Trust Fund issues 

5 obligations to the Secretary of the Treasury under 

6 section 4(b). 

7 (5) TREASURY RATE.—The term ‘‘Treasury 

8 rate’’ means a rate determined by the Secretary of 

9 the Treasury, taking into consideration current mar10 ket yields on outstanding marketable obligations of 

11 the United States of comparable maturities. 

12 SEC. 4. REFINANCING OF OUTSTANDING PRINCIPAL OF RE13 PAYABLE ADVANCES AND UNPAID INTEREST 

14 ON SUCH ADVANCES. 

15 (a) IN GENERAL.—On the refinancing date, the 

16 Trust Fund shall pay the market value of the outstanding 

17 repayable advances, plus accrued interest, by transferring 

18 into the general fund of the Treasury the following sums: 

19 (1) The proceeds from obligations that the 

20 Trust Fund shall issue to the Secretary of the 

21 Treasury in such amounts as the Secretaries of 

22 Labor and the Treasury shall determine and bearing 

23 interest at the Treasury rate, and that shall be in 

24 such forms and denominations and be subject to
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1 such other terms and conditions, including maturity, 

2 as the Secretary of the Treasury shall prescribe. 

3 (2) All, or that portion, of the appropriation 

4 made to the Trust Fund pursuant to section 5 that 

5 is needed to cover the difference defined in that sec6 tion. 

7 (b) ADDITIONAL ISSUANCE OF OBLIGATIONS.—In 

8 the event that the Trust Fund is unable to repay the obli9 gations that it has issued to the Secretary of the Treasury 

10 under subsection (a)(1) and this subsection, or is unable 

11 to make benefit payments and other authorized expendi12 tures, the Trust Fund shall issue obligations to the Sec13 retary of the Treasury in such amounts as may be nec14 essary to make such repayments, payments, and expendi15 tures, with a maturity of 1 year, and bearing interest at 

16 the Treasury 1 year rate. These obligations shall be in 

17 such forms and denominations and be subject to such 

18 other terms and conditions as the Secretary of the Treas19 ury shall prescribe. 

20 (c) AUTHORIZATION TO ISSUE OBLIGATIONS.—The 

21 Trust Fund is authorized to issue obligations to the Sec22 retary of the Treasury under subsections (a)(1) and (b). 

23 The Secretary of the Treasury is authorized to purchase 

24 such obligations of the Trust Fund. For the purposes of 

25 making such purchases, the Secretary of the Treasury 
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1 may use as a public debt transaction the proceeds from 

2 the sale of any securities issued under chapter 31 of title 

3 31, United States Code, and the purposes for which secu4 rities may be issued under such chapter are extended to 

5 include any purchase of such Trust Fund obligations 

6 under this subsection. 

7 SEC. 5. APPROPRIATIONS. 

8 There is hereby appropriated to the Trust Fund an 

9 amount sufficient to pay to the general fund of the Treas10 ury the difference between— 

11 (1) the market value of the outstanding repay12 able advances, plus accrued interest, and 

13 (2) the proceeds from the obligations issued by 

14 the Trust Fund to the Secretary of the Treasury 

15 under section 4(a)(1). 

16 SEC. 6. PREPAYMENT OF TRUST FUND OBLIGATIONS. 

17 The Trust Fund is authorized to repay any obligation 

18 issued to the Secretary of the Treasury under subsections 

19 (a)(1) and (b) of section 4 before its maturity date by pay20 ing a prepayment price that would, if the obligation being 

21 prepaid (including all unpaid interest accrued thereon 

22 through the date of prepayment) were purchased by a 

23 third party and held to the maturity date of such obliga24 tion, produce a yield to the third-party purchaser for the 

25 period from the date of purchase to the maturity date of 
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1 such obligation substantially equal to the Treasury yield 

2 on outstanding marketable obligations of the United 

3 States having a comparable maturity to this period. 

4 SEC. 7. EXTENSION OF EXCISE TAX LEVELS. 

5 Paragraph (2) of section 4121(e) of the Internal Rev6 enue Code of 1986 (relating to reduction in amount of 

7 tax) is amended to read as follows: 

8 ‘‘(2) TEMPORARY INCREASE TERMINATION

9 DATE.—For purposes of paragraph (1), the tem10 porary increase termination date is the first January 

11 1 following a determination by the Secretary that 

12 there are— 

13 ‘‘(A) no outstanding obligations of the 

14 Black Lung Disability Trust Fund held by the 

15 Secretary; and 

16 ‘‘(B) no unpaid interest on such obliga17 tions.’’.

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