255
otherwise be required to provide. Security may be 
provided under this paragraph without regard to 
whether a payment was made under section 9704(j). 
‘‘(3) SECURITY.—Security meets the require-
ments of this paragraph if—
‘‘(A) the security—
‘‘(i) is in the form of a bond, letter of 
credit, or cash escrow, 
‘‘(ii) is provided to the trustees of the 
1992 UMWA Benefit Plan solely for the 
purpose of paying premiums for bene-
ficiaries who would be described in section 
9712(b)(2)(B) if the requirements of this 
section were not met by the last signatory 
operator, and 
‘‘(iii) is in an amount equal to 1 year 
of liability of the last signatory operator 
under this section, determined by using the 
average cost of such operator’s liability dur-
ing the prior 3 calendar years; 
‘‘(B) the security is in addition to any 
other security required under any other provi-
sion of this title; and 
‘‘(C) the security remains in place for 5 
years.
256
‘‘(4) REFUNDS
OF
SECURITY.—The remaining 
amount of any security provided under this sub-
section (and earnings thereon) shall be refunded to the 
last signatory operator as of the earlier of—
‘‘(A) the termination of the obligations of 
the last signatory operator under this section, or 
‘‘(B) the end of the 5-year period described 
in paragraph (4)(C).’’. 
(c) 1992 UMWA BENEFIT PLAN.—Section 9712(d)(4) 
of the Internal Revenue Code of 1986 (relating to joint and 
several liability) is amended by adding at the end the fol-
lowing new sentence: ‘‘The provisions of section 9711(c)(2) 
shall apply to any last signatory operator described in such 
section (without regard to whether security is provided 
under such section, a payment is made under section 
9704(j), or both) and if security meeting the requirements 
of section 9711(c)(3) is provided, the common parent de-
scribed in section 9711(c)(2)(B) shall be exclusively respon-
sible for any liability for premiums under this section 
which, but for this sentence, would be required to be paid 
by the last signatory operator or any related person.’’. 
(d) SUCCESSOR IN INTEREST.—Section 9701(c) of the 
Internal Revenue Code of 1986 (relating to terms relating 
to operators) is amended by adding at the end the following 
new paragraph:
257
‘‘(8) SUCCESSOR IN INTEREST.—
‘‘(A) SAFE HARBOR.—The term ‘successor 
in interest’ shall not include any person who—
‘‘(i) is an unrelated person to an eligi-
ble seller described in subparagraph (C); 
and 
‘‘(ii) purchases for fair market value 
assets, or all of the stock, of a related person 
to such seller, in a bona fide, arm’s-length 
sale. 
‘‘(B) UNRELATED PERSON.—The term ‘un-
related person’ means a purchaser who does not 
bear a relationship to the eligible seller described 
in section 267(b). 
‘‘(C) ELIGIBLE SELLER.—For purposes of 
this paragraph, the term ‘eligible seller’ means 
an assigned operator described in section 
9704(j)(2) or a related person to such assigned 
operator.’’. 
(e) EFFECTIVE DATE.—The amendments made by this 
section shall take effect on the date of the enactment of this 
Act, except that the amendment made by subsection (d) 
shall apply to transactions after the date of the enactment 
of this Act.
258
SEC. 212. TRANSFERS TO FUNDS; PREMIUM RELIEF. 
(a) COMBINED FUND.—
(1) FEDERAL TRANSFERS.—Section 9705(b) of 
the Internal Revenue Code of 1986 (relating to trans-
fers from Abandoned Mine Reclamation Fund) is 
amended—
(A) in paragraph (1), by striking ‘‘section 
402(h)’’ and inserting ‘‘subsections (h) and (i) of 
section 402’’; 
(B) by striking paragraph (2) and inserting 
the following new paragraph: 
‘‘(2) USE OF FUNDS.—Any amount transferred 
under paragraph (1) for any fiscal year shall be used 
to pay benefits and administrative costs of bene-
ficiaries of the Combined Fund or for such other pur-
poses as are specifically provided in the Acts de-
scribed in paragraph (1).’’; and 
(C) by striking ‘‘FROM ABANDONED MINE 
RECLAMATION FUND’’ in the heading thereof. 
(2) MODIFICATIONS OF PREMIUMS TO REFLECT 
FEDERAL TRANSFERS.—
(A) ELIMINATION
OF
UNASSIGNED
BENE-
FICIARIES
PREMIUM.—Section 9704(d) of such 
Code (establishing unassigned beneficiaries pre-
mium) is amended to read as follows: 
‘‘(d) UNASSIGNED BENEFICIARIES PREMIUM.—
259
‘‘(1) PLAN YEARS ENDING ON OR BEFORE SEP-
TEMBER 30, 2006.—For plan years ending on or before 
September 30, 2006, the unassigned beneficiaries pre-
mium for any assigned operator shall be equal to the 
applicable percentage of the product of the per bene-
ficiary premium for the plan year multiplied by the 
number of eligible beneficiaries who are not assigned 
under section 9706 to any person for such plan year. 
‘‘(2) PLAN YEARS BEGINNING ON OR AFTER OC-
TOBER 1, 2006.—
‘‘(A) IN GENERAL.—For plan years begin-
ning on or after October 1, 2006, subject to sub-
paragraph (B), there shall be no unassigned 
beneficiaries premium, and benefit costs with re-
spect to eligible beneficiaries who are not as-
signed under section 9706 to any person for any 
such plan year shall be paid from amounts 
transferred under section 9705(b). 
‘‘(B) INADEQUATE TRANSFERS.—If, for any 
plan year beginning on or after October 1, 2006, 
the amounts transferred under section 9705(b) 
are less than the amounts required to be trans-
ferred to the Combined Fund under subsection 
(h)(2)(A) or (i) of section 402 of the Surface 
Mining Control and Reclamation Act of 1977
260
(30 U.S.C. 1232)), then the unassigned bene-
ficiaries premium for any assigned operator 
shall be equal to the operator’s applicable per-
centage of the amount required to be so trans-
ferred which was not so transferred.’’. 
(B) PREMIUM ACCOUNTS.—
(i) CREDITING OF ACCOUNTS.—Section 
9704(e)(1) of such Code (relating to pre-
mium accounts; adjustments) is amended by 
inserting ‘‘and amounts transferred under 
section 9705(b)’’ after ‘‘premiums received’’. 
(ii) SURPLUSES
ATTRIBUTABLE
TO 
PUBLIC FUNDING.—Section 9704(e)(3)(A) of 
such Code is amended by adding at the end 
the following new sentence: ‘‘Amounts cred-
ited to an account from amounts trans-
ferred under section 9705(b) shall not be 
taken into account in determining whether 
there is a surplus in the account for pur-
poses of this paragraph.’’
(C) 
APPLICABLE
PERCENTAGE.—Section 
9704(f)(2) of such Code (relating to annual ad-
justments) is amended by adding at the end the 
following new subparagraph:
261
‘‘(C) In the case of plan years beginning on 
or after October 1, 2007, the total number of as-
signed eligible beneficiaries shall be reduced by 
the eligible beneficiaries whose assignments have 
been revoked under section 9706(h).’’. 
(3) ASSIGNMENTS AND REASSIGNMENT.—Section 
9706 of the Internal Revenue Code of 1986 (relating 
to assignment of eligible beneficiaries) is amended by 
adding at the end the following: 
‘‘(h) ASSIGNMENTS AS OF OCTOBER 1, 2007.—
‘‘(1) IN GENERAL.—Subject to the premium obli-
gation set forth in paragraph (3), the Commissioner 
of Social Security shall—
‘‘(A) revoke all assignments to persons other 
than 1988 agreement operators for purposes of 
assessing premiums for plan years beginning on 
and after October 1, 2007; and 
‘‘(B) make no further assignments to per-
sons other than 1988 agreement operators, except 
that no individual who becomes an unassigned 
beneficiary by reason of subparagraph (A) may 
be assigned to a 1988 agreement operator. 
‘‘(2) REASSIGNMENT
UPON
PURCHASE.—This 
subsection shall not be construed to prohibit the reas-
262
signment under subsection (b)(2) of an eligible bene-
ficiary. 
‘‘(3) LIABILITY OF PERSONS DURING THREE FIS-
CAL YEARS BEGINNING ON AND AFTER OCTOBER 1, 
2007.—In the case of each of the fiscal years beginning 
on October 1, 2007, 2008, and 2009, each person other 
than a 1988 agreement operator shall pay to the 
Combined Fund the following percentage of the 
amount of annual premiums that such person would 
otherwise be required to pay under section 9704(a), 
determined on the basis of assignments in effect with-
out regard to the revocation of assignments under 
paragraph (1)(A): 
‘‘(A) For the fiscal year beginning on Octo-
ber 1, 2007, 55 percent. 
‘‘(B) For the fiscal year beginning on Octo-
ber 1, 2008, 40 percent. 
‘‘(C) For the fiscal year beginning on Octo-
ber 1, 2009, 15 percent.’’. 
(4) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to plan years of the 
Combined Fund beginning after September 30, 2006. 
(b) 1992 UMWA BENEFIT AND OTHER PLANS.—
(1) TRANSFERS TO PLANS.—Section 9712(a) of 
the Internal Revenue Code of 1986 (relating to the es-
263
tablishment and coverage of the 1992 UMWA Benefit 
Plan) is amended by adding at the end the following: 
‘‘(3) TRANSFERS UNDER OTHER FEDERAL STAT-
UTES.—
‘‘(A) IN GENERAL.—The 1992 UMWA Ben-
efit Plan shall include any amount transferred 
to the plan under subsections (h) and (i) of sec-
tion 402 of the Surface Mining Control and Rec-
lamation Act of 1977 (30 U.S.C. 1232). 
‘‘(B) USE OF FUNDS.—Any amount trans-
ferred under subparagraph (A) for any fiscal 
year shall be used to provide the health benefits 
described in subsection (c) with respect to any 
beneficiary for whom no monthly per beneficiary 
premium is paid pursuant to paragraph (1)(A) 
or (3) of subsection (d). 
‘‘(4) SPECIAL RULE FOR 1993 PLAN.—
‘‘(A) IN GENERAL.—The plan described in 
section 402(h)(2)(C) of the Surface Mining Con-
trol and Reclamation Act of 1977 (30 U.S.C. 
1232(h)(2)(C)) shall include any amount trans-
ferred to the plan under subsections (h) and (i) 
of the Surface Mining Control and Reclamation 
Act of 1977 (30 U.S.C. 1232).
264
‘‘(B) USE OF FUNDS.—Any amount trans-
ferred under subparagraph (A) for any fiscal 
year shall be used to provide the health benefits 
described in section 402(h)(2)(C)(i) of the Sur-
face Mining Control and Reclamation Act of 
1977 (30 U.S.C. 1232(h)(2)(C)(i)) to individuals 
described in section 402(h)(2)(C) of such Act (30 
U.S.C. 1232(h)(2)(C)).’’. 
(2) PREMIUM ADJUSTMENTS.—
(A) IN
GENERAL.—Section 9712(d)(1) of 
such Code (relating to guarantee of benefits) is 
amended to read as follows: 
‘‘(1) IN GENERAL.—All 1988 last signatory oper-
ators shall be responsible for financing the benefits de-
scribed in subsection (c) by meeting the following re-
quirements in accordance with the contribution re-
quirements established in the 1992 UMWA Benefit 
Plan: 
‘‘(A) The payment of a monthly per bene-
ficiary premium by each 1988 last signatory op-
erator for each eligible beneficiary of such oper-
ator who is described in subsection (b)(2) and 
who is receiving benefits under the 1992 UMWA 
benefit plan.
265
‘‘(B) The provision of a security (in the 
form of a bond, letter of credit, or cash escrow) 
in an amount equal to a portion of the projected 
future cost to the 1992 UMWA Benefit Plan of 
providing health benefits for eligible and poten-
tially eligible beneficiaries attributable to the 
1988 last signatory operator. 
‘‘(C) If the amounts transferred under sub-
section (a)(3) are less than the amounts required 
to be transferred to the 1992 UMWA Benefit 
Plan under subsections (h) and (i) of section 402 
of the Surface Mining Control and Reclamation 
Act of 1977 (30 U.S.C. 1232), the payment of an 
additional backstop premium by each 1988 last 
signatory operator which is equal to such opera-
tor’s share of the amounts required to be so 
transferred but which were not so transferred, de-
termined on the basis of the number of eligible 
and potentially eligible beneficiaries attributable 
to the operator.’’. 
(B) CONFORMING
AMENDMENTS.—Section 
9712(d) of such Code is amended—
(i) in paragraph (2)(B), by striking 
‘‘prefunding’’ and inserting ‘‘backstop’’, and
266
(ii) in paragraph (3), by striking 
‘‘paragraph (1)(B)’’ and inserting ‘‘para-
graph (1) (A)’’. 
(C) EFFECTIVE
DATE.—The amendments 
made by this paragraph shall apply to fiscal 
years beginning on or after October 1, 2010. 
SEC. 213. OTHER PROVISIONS. 
(a) BOARD OF TRUSTEES.—Section 9702(b) of the In-
ternal Revenue Code of 1986 (relating to board of trustees 
of the Combined Fund) is amended to read as follows: 
‘‘(b) BOARD OF TRUSTEES.—
‘‘(1) IN GENERAL.—For purposes of subsection 
(a), the board of trustees for the Combined Fund shall 
be appointed as follows: 
‘‘(A) 2 individuals who represent employers 
in the coal mining industry shall be designated 
by the BCOA; 
‘‘(B) 2 individuals designated by the United 
Mine Workers of America; and 
‘‘(C) 3 individuals selected by the individ-
uals appointed under subparagraphs (A) and 
(B). 
‘‘(2) SUCCESSOR
TRUSTEES.—Any successor 
trustee shall be appointed in the same manner as the 
trustee being succeeded. The plan establishing the
267
Combined Fund shall provide for the removal of trust-
ees. 
‘‘(3) SPECIAL
RULE.—If the BCOA ceases to 
exist, any trustee or successor under paragraph (1)(A) 
shall be designated by the 3 employers who were mem-
bers of the BCOA on the enactment date and who 
have been assigned the greatest number of eligible 
beneficiaries under section 9706.’’. 
(b) ENFORCEMENT OF OBLIGATIONS.—
(1) 
FAILURE
TO
PAY
PREMIUMS.—Section 
9707(a) of the Internal Revenue Code of 1986 is 
amended to read as follows: 
‘‘(a) FAILURES TO PAY.—
‘‘(1) 
PREMIUMS
FOR
ELIGIBLE
BENE-
FICIARIES.—There is hereby imposed a penalty on the 
failure of any assigned operator to pay any premium 
required to be paid under section 9704 with respect 
to any eligible beneficiary. 
‘‘(2) CONTRIBUTIONS
REQUIRED
UNDER
THE 
MINING LAWS.—There is hereby imposed a penalty on 
the failure of any person to make a contribution re-
quired under section 402(h)(5)(B)(ii) of the Surface 
Mining Control and Reclamation Act of 1977 to a 
plan referred to in section 402(h)(2)(C) of such Act. 
For purposes of applying this section, each such re-