for any plan year shall be the percentage
(if any) by which the medical component of
the Consumer Price Index for the calendar
year in which the plan year begins exceeds
such component for the preceding calendar
year.
‘‘(C) CAPTIVE
COAL
PRODUCING
OPERA-
TOR.—For purposes of this paragraph, the term
‘captive coal producing operator’ means a 1988
agreement operator if—
‘‘(i) such operator produced bitu-
minous coal during the period from Janu-
ary 1, 1990, to December 31, 1994, and
‘‘(ii) such operator (or a related per-
son to such operator) consumed annually
at least 30 percent of such coal in connec-
tion with the operator’s (or related per-
son’s) steelmaking operations.’’
(b) EFFECTIVE DATES.—
(1) IN
GENERAL.—The amendment made by
this section shall apply to plan years of the Com-
bined Fund beginning on and after October 1, 1996.
(2) PRIOR PLAN YEARS.—
(A) 
IN
GENERAL.—Section
9704(b)(2)(A)(i) of the Internal Revenue Code
of 1986 (as amended by subsection (a)) shall
apply to plan years of the Combined Fund be-
ginning before October 1, 1996.
(B) PAYMENT OF PREMIUMS.—If any as-
signed operator owes any additional premiums
for any plan year ending on or before Septem-
ber 30, 1996, by reason of the amendment
made by subsection (a), the assigned operator
shall pay such additional premiums to the Com-
bined Fund within 90 days after the date of the
enactment of this Act. Such premiums shall be
treated as paid for the year to which they relate
and not to the year in which paid, except that
no penalties or interest shall be assessed for
any period beginning before the close of the 90-
day period.
(3) CREDIT OR REFUND OF OVERPAYMENT.—
If, for the plan year beginning on October 1, 1996,
an assigned operator paid premiums in excess of the
premiums owed after the application of the amend-
ment made by subsection (a)—
(A) such excess shall be treated as a credit
against the premiums payable by the operator
for the following plan year, and
(B) to the extent such excess is greater
than such premiums, such excess shall be re-
funded to the operator.
SEC. 202. CAP ON PREMIUM PAYMENTS FOR SMALL
REACHBACKS; ADJUSTMENT TO PREMIUMS
TO REFLECT SURPLUS OR DEFICIT.
(a) IN GENERAL.—Part II of subchapter B of chap-
ter 99 (relating to financing of Combined Benefit Fund)
is amended by inserting after section 9704 the following
new section:
‘‘SEC. 9704A. ADJUSTMENTS IN ANNUAL PREMIUMS OF CER-
TAIN OPERATORS.
‘‘(a) GENERAL RULE.—The annual premium of an
assigned operator under section 9704(a) shall—
‘‘(1) in the case of a small reachback signatory
operator, be reduced as provided in subsection (b),
and
‘‘(2) in any case in which there is a surplus or
deficit in the Combined Fund to which subsection
(c) applies, be adjusted as provided in subsection (c).
‘‘(b) REDUCTIONS FOR SMALL REACHBACK SIGNA-
TORY OPERATORS.—
‘‘(1) IN GENERAL.—In the case of any plan
year beginning on or after February 1, 1993, the
annual premium under section 9704(a) for any small
reachback signatory operator for such plan year
shall not exceed 5 percent of the operator’s average
annual taxable income for purposes of chapter 1 for
the 5-taxable year period ending with the operator’s
most recent taxable year ending before the beginning
of the plan year.
‘‘(2) SMALL
REACHBACK
SIGNATORY
OPERA-
TORS.—For purposes of this section—
‘‘(A) IN
GENERAL.—The term ‘small
reachback signatory operator’ means any signa-
tory operator other than a 1988 agreement op-
erator—
‘‘(i) the average annual gross income
of which for purposes of chapter 1 for the
5-taxable year period ending with the oper-
ator’s most recent taxable year ending be-
fore October 1, 1993, did not exceed
$25,000,000, and
‘‘(ii) which was not engaged in the
production of bituminous coal on or after
October 1, 1993.
For purposes of this subparagraph, production
by a related person shall be treated as produc-
tion by the assigned operator.
‘‘(B) PRODUCTION
OF
COAL.—For pur-
poses of subparagraph (A), an assigned opera-
tor or related person shall be treated as en-
gaged in the production of bituminous coal if it
has employed employees in—
‘‘(i) the extraction of bituminous coal,
or
‘‘(ii) the preparation, processing, or
changing of bituminous coal for sale.
‘‘(3) AGGREGATION
RULES.—In determining
gross income or taxable income for purposes of this
section, an assigned operator and any related per-
sons shall be treated as 1 person.
‘‘(4) BURDEN OF PROOF.—A person seeking to
have this subsection apply shall have the burden of
establishing to the satisfaction of the Commissioner
of Social Security—
‘‘(A) that this subsection applies to such
person, and
‘‘(B) the amount of the gross or taxable
income of such person or any related person to
be used in applying this subsection.
‘‘(c) ADJUSTMENTS BASED UPON FUND SURPLUS
OR DEFICIT.—
‘‘(1) TREATMENT OF SURPLUS.—If, as of the
close of any plan year ending on or after September
30, 1997, the Combined Fund has a surplus in net
assets in excess of 100 percent of the net expenses
of the Combined Fund for the plan year, the annual
premium under section 9704(a) for the succeeding
plan year of any assigned operator other than a
small reachback signatory operator shall be reduced
by an amount which bears the same ratio to the sur-
plus in excess of 100 percent of such net expenses
as—
‘‘(A) such assigned operator’s aggregate
premiums for the plan year of such surplus for
beneficiaries assigned to such operator (deter-
mined without regard to this section), bears to
‘‘(B) the sum of the amounts determined
under subparagraph (A) for all assigned opera-
tors other than small reachback signatory oper-
ators.
‘‘(2) TREATMENT OF DEFICIT.—
‘‘(A) IN GENERAL.—If, as of the close of
any plan year ending on or after September 30,
1997, the Combined Fund has a deficit, the an-
nual premium under section 9704(a) for the
succeeding plan year of any assigned operator
shall be increased by an amount which bears
the same ratio to the amount of the deficit as—
‘‘(i) such assigned operator’s aggre-
gate premiums for the plan year of such
deficit for beneficiaries assigned to such
operator (determined without regard to
this section), bears to
‘‘(ii) the sum of the amounts deter-
mined under subparagraph (A) for all as-
signed operators.
‘‘(B) CAP ON PREMIUM INCREASE.—In no
event shall this paragraph result in the annual
premiums of a small reachback signatory opera-
tor exceeding the amount determined under
subsection (b) for the plan year. Any increase
under subparagraph (A) not so allowed shall,
subject to this subparagraph, be allocated rat-
ably among the other assigned operators.
‘‘(d) COMPUTATION OF SURPLUS OR DEFICIT.—For
purposes of this section, any determination of a surplus
or deficit in the Combined Fund—
‘‘(1) shall be calculated on a cash receipts and
disbursements basis,
‘‘(2) shall be calculated without regard to any
premiums, expenditures, or other items in any sub-
account of the death benefits premium account es-
tablished under section 9704(e)(4),
‘‘(3) shall be made and certified by an inde-
pendent auditor retained by the trustees, and
‘‘(4) once so certified, shall be reviewable by a
court of law only to determine if such determination
is reasonable.
A determination shall be considered reasonable for pur-
poses of paragraph (3) if it is made in accordance with
generally accepted accounting principles and is based on
assumptions which, in the aggregate, are reasonable.’’
(b) CONFORMING AMENDMENTS.—
(1) Section 9704(a) (relating to annual pre-
miums) is amended by striking ‘‘Each’’ and insert-
ing ‘‘Subject to section 9704A, each’’.
(2) The table of sections for part II of sub-
chapter B of chapter 99 is amended by inserting
after the item relating to section 9704 the following
new item:
‘‘Sec. 9704A. Adjustments in annual premiums of certain operators.’’
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
this section shall apply to plan years of the Com-
bined Fund beginning after January 31, 1993.
(2) REFUND OF EXCESS PAYMENTS.—If a small
reachback signatory operator (as defined in section
9704A(b)(2) of the Internal Revenue Code of 1986,
as added by this section) has paid premiums in ex-
cess of the amount owed for any plan year ending
on or before September 30, 1996, by reason of the
amendment made by subsection (a), the Combined
Fund shall refund such excess to the operator within
90 days after the date of the enactment of this Act.
(3) WAIVER OF PENALTIES.—
(A) IN GENERAL.—In the case of an appli-
cable operator, no penalty shall be imposed
under section 9707 of such Code on any failure
of such operator to pay any installment of a
premium due under section 9704 of such Code
before the 90th day after the enactment of this
Act if the operator pays such installment before
such date. For purposes of this subsection, the
amount of the installment shall be determined
after application of the amendments made by
this Act.
(B) COMPLIANCE.—An operator shall not
be treated as failing to meet the requirements
of subparagraph (A) with respect to any install-
ment if—
(i) the failure to pay the installment
before the 90th day after the date of the
enactment of this Act was due to reason-
able cause, and
(ii) the failure is corrected within 90
days of the later of—
(I) notice of the failure, or
(II) a final administrative or ju-
dicial determination of the amount of
the 
installment 
which 
is 
not
reviewable or appealable.
(C) APPLICABLE
OPERATOR.—For pur-
poses of this paragraph, the term ‘‘applicable
operator’’ means any—
(i) small reachback signatory operator
(as defined in section 9704A(b)(2) of the
Internal Revenue Code of 1986, as added
by this section), or
(ii) any assigned operator not de-
scribed in clause (i) that was not a signa-
tory to the 1978 National Bituminous Coal
Wage Agreement or any subsequent coal
wage agreement.