[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2366 Introduced in Senate (IS)]







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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Black Lung Disability Trust Fund 
Debt Restructuring Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) The Black Lung Disability Trust Fund (in this Act 
        referred to as the ``Trust Fund'') was created in 1978 as part 
        of the Black Lung Benefits Revenue Act of 1977, with the goal 
        of shifting, from the Federal Government to the coal mining 
        industry, the cost of compensating victims of occupational 
        black lung disease.
            (2) The Trust Fund draws its principal revenue from excise 
        taxes on coal. The Black Lung Benefits Revenue Act of 1977 
        authorized repayable advances from the Treasury to the Trust 
        Fund, in such sums as may be necessary to make benefit payments 
        and other authorized expenditures. Any such advances are 
        required to be repaid, with interest at the rate prescribed in 
        section 9501(c)(3) of the Internal Revenue Code of 1986 to the 
        general fund of the Treasury when the Secretary of the Treasury 
        determines that monies are available in the Trust Fund for such 
        purposes.
            (3) In each year prior to 1990, the Trust Fund revenues 
        were insufficient to satisfy all benefit payments and other 
        authorized expenditures, resulting in the need for repayable 
        advances from the Treasury to the Trust Fund.
            (4) Since 1990, the Trust Fund revenues from excise taxes 
        on coal have generally been sufficient to cover current benefit 
        payments and administrative costs, but have not been sufficient 
        to repay any portion of the outstanding principal that the 
        Trust Fund owes to the Treasury. Instead, that indebtedness has 
        grown each year as additional advances were taken to pay the 
        portion of the interest charges not covered by the Trust Fund's 
        revenues.
            (5) Beginning in 1998, the annual interest charges on the 
        debt alone have exceeded benefit payments made by the Trust 
        Fund.
            (6) The annual interest charges to the Trust Fund now 
        exceed its total annual excise tax revenues.
            (7) Without action, the Trust Fund's indebtedness to the 
        Treasury, which totals approximately $8,200,000,000, will 
        continue to grow and the Trust Fund will never become solvent, 
        even when benefit outlays have declined to a level approaching 
        zero.
            (8) It is in the public interest to refinance the Trust 
        Fund debt and to restore long-term fiscal solvency to the Trust 
        Fund.

SEC. 3. DEFINITIONS.

    For purposes of this Act:
            (1) Repayable advance.--The term ``repayable advance'' 
        means an amount that has been appropriated to the Trust Fund in 
        order to make benefit payments and other expenditures that are 
        authorized under section 9501 of the Internal Revenue Code of 
        1986 and are required to be repaid when the Secretary of the 
        Treasury determines that monies are available in the Trust Fund 
        for this purpose.
            (2) Market value of the outstanding repayable advances, 
        plus accrued interest.--The term ``market value of the 
        outstanding repayable advances, plus accrued interest'' means 
        the present value (determined by the Secretary of the Treasury 
        as of the refinancing date and using the Treasury rate as the 
        discount rate) of the stream of principal and interest payments 
        derived assuming that each repayable advance that is 
        outstanding on the refinancing date is due on the thirtieth 
        anniversary of the end of the fiscal year in which the advance 
        was made to the Trust Fund, and that all such principal and 
        interest payments are made on September 30 of the applicable 
        fiscal year.
            (3) Refinancing date.--The term ``refinancing date'' means 
        the date occurring 2 days after the date of the enactment of 
        this Act.
            (4) Treasury 1-year rate.--The term ``Treasury 1-year 
        rate'' means a rate determined by the Secretary of the 
        Treasury, taking into consideration current market yields on 
        outstanding marketable obligations of the United States with 
        remaining periods to maturity of approximately 1 year, to have 
        been in effect as of the close of business 1 business day 
        before the date on which the Trust Fund issues obligations to 
        the Secretary of the Treasury under section 4(b).
            (5) Treasury rate.--The term ``Treasury rate'' means a rate 
        determined by the Secretary of the Treasury, taking into 
        consideration current market yields on outstanding marketable 
        obligations of the United States of comparable maturities.

SEC. 4. REFINANCING OF OUTSTANDING PRINCIPAL OF REPAYABLE ADVANCES AND 
              UNPAID INTEREST ON SUCH ADVANCES.

    (a) In General.--On the refinancing date, the Trust Fund shall pay 
the market value of the outstanding repayable advances, plus accrued 
interest, by transferring into the general fund of the Treasury the 
following sums:
            (1) The proceeds from obligations that the Trust Fund shall 
        issue to the Secretary of the Treasury in such amounts as the 
        Secretaries of Labor and the Treasury shall determine and 
        bearing interest at the Treasury rate, and that shall be in 
        such forms and denominations and be subject to such other terms 
and conditions, including maturity, as the Secretary of the Treasury 
shall prescribe.
            (2) All, or that portion, of the appropriation made to the 
        Trust Fund pursuant to section 5 that is needed to cover the 
        difference defined in that section.
    (b) Additional Issuance of Obligations.--In the event that the 
Trust Fund is unable to repay the obligations that it has issued to the 
Secretary of the Treasury under subsection (a)(1) and this subsection, 
or is unable to make benefit payments and other authorized 
expenditures, the Trust Fund shall issue obligations to the Secretary 
of the Treasury in such amounts as may be necessary to make such 
repayments, payments, and expenditures, with a maturity of 1 year, and 
bearing interest at the Treasury 1 year rate. These obligations shall 
be in such forms and denominations and be subject to such other terms 
and conditions as the Secretary of the Treasury shall prescribe.
    (c) Authorization To Issue Obligations.--The Trust Fund is 
authorized to issue obligations to the Secretary of the Treasury under 
subsections (a)(1) and (b). The Secretary of the Treasury is authorized 
to purchase such obligations of the Trust Fund. For the purposes of 
making such purchases, the Secretary of the Treasury may use as a 
public debt transaction the proceeds from the sale of any securities 
issued under chapter 31 of title 31, United States Code, and the 
purposes for which securities may be issued under such chapter are 
extended to include any purchase of such Trust Fund obligations under 
this subsection.

SEC. 5. APPROPRIATIONS.

    There is hereby appropriated to the Trust Fund an amount sufficient 
to pay to the general fund of the Treasury the difference between--
            (1) the market value of the outstanding repayable advances, 
        plus accrued interest, and
            (2) the proceeds from the obligations issued by the Trust 
        Fund to the Secretary of the Treasury under section 4(a)(1).

SEC. 6. PREPAYMENT OF TRUST FUND OBLIGATIONS.

    The Trust Fund is authorized to repay any obligation issued to the 
Secretary of the Treasury under subsections (a)(1) and (b) of section 4 
before its maturity date by paying a prepayment price that would, if 
the obligation being prepaid (including all unpaid interest accrued 
thereon through the date of prepayment) were purchased by a third party 
and held to the maturity date of such obligation, produce a yield to 
the third-party purchaser for the period from the date of purchase to 
the maturity date of such obligation substantially equal to the 
Treasury yield on outstanding marketable obligations of the United 
States having a comparable maturity to this period.

SEC. 7. EXTENSION OF EXCISE TAX LEVELS.

    Paragraph (2) of section 4121(e) of the Internal Revenue Code of 
1986 (relating to reduction in amount of tax) is amended to read as 
follows:
            ``(2) Temporary increase termination date.--For purposes of 
        paragraph (1), the temporary increase termination date is the 
        first January 1 following a determination by the Secretary that 
        there are--
                    ``(A) no outstanding obligations of the Black Lung 
                Disability Trust Fund held by the Secretary; and
                    ``(B) no unpaid interest on such obligations.''.
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