[Congressional Record Volume 148, Number 43 (Wednesday, April 17, 2002)]
[Senate]
[Pages S2842-S2847]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ROCKEFELLER (for himself, Mr. Specter, Mr. Daschle, Mr. 
        Wellstone, Mr. Durbin, Ms. Mikulski, Mr. Sarbanes, Mr. Dayton, 
        and Mrs. Clinton):
  S. 2189. A bill to amend the Trade Act of 1974 to remedy certain 
effects of injurious steel imports by protecting benefits of steel 
industry retirees and encouraging the strengthening of the American 
steel industry; to the Committee on Finance.
 Mr. ROCKEFELLER. Mr. President, the American steel industry 
will not consolidate and will not survive without relief from their 
unique burden of substantial retiree health care costs. Failing to 
assist the American steel industry with its retiree health care costs 
puts our industry at a tremendous disadvantage as it competes in

[[Page S2843]]

the world markets. If we are to have a competitive, viable industry, we 
must not shirk our responsibility. In the case of steel in America, 
that means three things: tariffs under Section 201, as is provided for 
under our trade laws; legacy, retiree health, relief; and effective 
consolidation of the steel industry.
  Earlier this year, the President imposed limited and temporary steel 
tariffs under Section 201. Today, I introduce the Steel Industry 
Consolidation and Retiree Benefits Protection Act of 2002, the Steel 
Legacy bill. This bill provides strong incentives for consolidation in 
the United States steel industry by supporting companies' retiree 
health care costs. This bill provides desperately needed medical care 
to retirees whose companies have been forced out of business by 
imports. This bill is critical to the preservation of the American 
steel industry, and it is humane to those individuals who have paid a 
very high price for our nation's free trade policies.
  The American steel industry has been facing an unprecedented crisis 
since 1997, when the Asian financial crisis disrupted global steel 
trade and diverted much of the world's excess steel capacity to the 
U.S. market. Thirty-three U.S. steel companies, representing over 40 
percent of domestic steelmaking capacity, have gone into bankruptcy 
since 1999, including such venerable names as Bethlehem Steel and LTV. 
Wheeling Pittsburgh Steel in my state is in the process of 
reorganizing. Many more steel companies have been forced into 
liquidation. Almost 50,000 steelmaking jobs have been lost in this 
country since the steel crisis began in 1998--losses that come on top 
of hundreds of thousands of steel job losses in the two preceding 
decades.
  The cause of this crisis in the industry is not that demand for steel 
has suddenly collapsed or that the competitiveness of the American 
steel industry has suddenly collapsed, but because foreign steelmakers 
have enjoyed decades of government subsidies and protection. Those 
foreign subsidies have created massive global steel overcapacity, and 
that foreign protection has ensured that most of the world's 
overcapacity has been directed at the U.S. market, which has been the 
most open major market in the world.
  The crisis our steel industry currently faces could well mean the end 
of steelmaking in the United States. This would have grave consequences 
for steel companies and steel workers, for the steel communities that 
depend on them, and for our nation's industrial base and our national 
defense. In recognition that this could not be allowed to happen, the 
President announced last month that he would impose temporary Section 
201 tariff measures on some steel imports. These measures will help 
give the U.S. steel industry some breathing room to recover. I commend 
the President for recognizing the importance of maintaining a domestic 
steel manufacturing base and for taking these steps.
  Still, I think it's essential to realize that the Section 201 
measures are limited in their scope and duration: first, the tariffs 
range from 8 percent to 30 percent, far less than the level recommended 
by two of the ITC Commissioners and the level that I and many others in 
the steel industry had argued for. And these tariffs are lowered 
dramatically each year, and stop after only three years. The tariffs do 
not apply to all steel products. Because of this, foreign steel 
companies will be able to engage in circumvention measures to get 
around the tariffs, as they have with antidumping measures. Under the 
201 relief, tariffs were imposed on some grades of steel, others were 
exempted altogether, numerous exemptions for specific steel products 
have been issued, and for the critical category of slab, a tariff rate 
quota has been imposed that is unlikely to have any positive effect 
whatsoever. The tariffs are not being applied across the board to all 
foreign steel producers; the relief exempts all steel from developing 
countries and from NAFTA members, who between them represent a 
significant portion, over a third, of overall U.S. steel imports.
  We knew from the beginning of the 201 process that even in the best 
of circumstances, it was clear that Section 201 tariffs were going to 
provide only part of the solution to help the domestic steel industry 
respond to this crisis. But the Section 201 remedy imposed, with its 
exclusions and exemptions and declining tariffs, makes the need for 
additional measures even more compelling.
  Section 201 will slow the tide of imports. But it will not resolve 
the other critical issues that will determine whether America's 
integrated steelmaking capacity survives. America's integrated 
steelmakers face massive ``legacy costs'' for retiree health and 
pension benefits, stemming from the dramatic reduction in the American 
steel industry's active workforce over the past two decades, which in 
turn results from successive Administrations' inability to negotiate an 
agreement for foreign governments to stop subsidizing their 
steelmakers. These legacy costs both hurt American steel's 
international competitiveness and serve as a liability that has 
prevented the consolidation of the fragmented domestic steel industry. 
Industry consolidation is another issue that must be addressed: with 
foreign steelmakers merging to create a new level of top tier 
steelmakers, American steelmakers risk being permanently consigned to 
the second rank, with sub-scale facilities and insufficient revenues to 
fund the necessary investment in research and technology. Finally, we 
must take measures to mitigate the human cost of this steel crisis, 
particularly the cost to retirees who worked long, hard years to earn 
health and pension benefits for themselves and their families, but now 
risk seeing all that taken away because the company that pays those 
benefits is threatened by unfair foreign trade practices.
  The bill I am introducing today, the Steel Industry Retiree Benefits 
Protection Act of 2002, addresses the toughest of these problems. It 
guarantees the health care coverage and a very limited life insurance 
benefit for steel industry retirees whose employer is acquired by 
another steelmaker or whose employer is forced to shut down because no 
other steelmaker will acquire it. This will ensure that in steel 
communities throughout the nation, no retirees will lose their critical 
health benefits simply because of a crisis in the global steel industry 
that our government failed to avert. Equally important, this bill will 
address retiree legacy costs in a way that will enhance our steel 
industry's competitiveness, by clearing the way for the industry 
consolidation that is necessary and inevitable if the American steel 
industry is to survive.
  The mechanics of the bill are fairly simple. A Federal trust fund 
will be established that will assume the retirees' health care and life 
insurance costs for steel, iron ore, and coke producers, and those who 
transport steel mill products for steelmaking operations, that are 
acquired by another company; that are in bankruptcy and attempted 
unsuccessfully to be acquired by another company, and thus have been 
closed, or are in imminent danger of closing, or have been unable to be 
acquired for at least two years; that are in bankruptcy and sell a 
significant steelmaking operation to another company; or, finally, in 
order to ensure that the assumption of legacy costs does not distort 
competition within the domestic steel industry, if a significant 
portion of the entire industry's legacy costs have been assumed by the 
Federal trust fund, all steel industry retirees and beneficiaries would 
be eligible to be covered by the program.
  The money for the Fund to pay for these legacy costs will come from 
the following: steel tariff revenues; an acquired steelmaker's retiree 
health care trust fund assets; payments for 10 years by the qualified 
steel company of $5 per ton of steelmaking capacity, subject to the 
bill's provisions; retiree premiums; and, and appropriated funds if 
necessary.
  In order to simplify the management of the program, retiree health 
benefits assumed by the Fund will be limited to Federal Blue Cross/Blue 
Shield health benefits, a fair and reasonable standard of health 
coverage. Life insurance will be limited to a one-time payment of 
$5,000 dollars. The program will be administered by the Secretary of 
Commerce and by Trustees who are designated by both management and 
labor.
  This bill is supported by both the integrated steelmakers and by the 
steel unions, who understand what it will take to save the American 
steel industry. They know that legacy costs have been the major barrier 
to consolidation

[[Page S2844]]

of the American steel market and that it is critical that we resolve 
that problem if we are to preserve retiree health benefits and an 
integrated domestic steel industry. I am introducing this legislation 
with my partner as Co-Chair of the Senate Steel Caucus, Senator 
Specter. We have a history of working together on issues that are vital 
to the core industries in our states and the workers who have helped 
fuel and build this nation. I am pleased that Senators Wellstone, 
Durbin, Mikulski, Sarbanes,  and Dayton, and the distinguished Senate 
Majority Leader, who have long been champions of retirees and workers 
health care issues, join me today as cosponsors. We have also worked in 
close consultation with our colleagues on the House side, especially 
members of the House Steel Caucus, who share our concern that these 
critical legacy cost issues be addressed.
  But, make no mistake, this steel legacy legislation will not happen 
without the active involvement of the President. This bill is fair, it 
is pro-competition, and there is a broad consensus that legacy cost 
legislation like this is absolutely necessary if we are to preserve 
integrated steelmaking in the United States, as well as the communities 
and businesses that depend on those facilities. But realistically, a 
program like this is only going to be enacted with the strong support 
and active engagement of the President.
  The President's announcement of his decision on Section 201 tariffs 
last month was an encouraging sign that the President was committed to 
the preservation of the American steel industry, and his recognition 
that, if equipped with the right tools and competing in a fair market, 
the domestic steel industry can regain its former role as the world's 
leader. I surely hope so. But I know that without President Bush's 
support for a legacy cost bill, the Section 201 tariffs he announced 
last month will not be enough, and we will witness the erosion of a 
vital national asset, the American steel industry.
  I appeal to the President to maintain his personal interest in the 
well-being of our steel industry. It is vital to our nation's economy 
and to our defense capability. I encourage the President to lead on 
this issue because surely, in these times, without his support and 
quick involvement, we will not be able to get a bill through this 
Congress. I hope the Administration will work with us here in the 
Senate to pass a legacy cost bill that will ensure fairness for 
America's retired steelworkers and a competitive future for America's 
integrated steel industry. We need legacy cost legislation like that 
outlined in the bill I am submitting today, if we are to preserve the 
U.S. steel industry. I urge my colleagues to join me in supporting this 
bill.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2189

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

     SECTION 1. SHORT TITLE; CONGRESSIONAL FINDINGS AND PURPOSE.

       (a) Short Title.--This Act may be cited as the ``Steel 
     Industry Consolidation and Retiree Benefits Protection Act of 
     2002''.
       (b) Congressional Findings and Purpose.--
       (1) Findings.--Congress finds the following:
       (A) The United States Department of Commerce has documented 
     that American steelworkers and their employers have been 
     forced over the last 30 years to compete in a global steel 
     market in which foreign governments have engaged in market 
     distorting practices that to this day sustain enormous 
     overcapacity in world steel supplies.
       (B) The United States International Trade Commission, in 
     its recent investigation of steel imports to the United 
     States under section 201 of the Trade Act of 1974, has 
     concluded that surges of imported steel since the Asian 
     crisis of 1997 have caused serious injury to American 
     producers of most steel products.
       (C) Since 1997, 32 American steel companies have been 
     forced to seek bankruptcy protection, over 45,000 
     steelworkers have lost their jobs, and over 100,000 steel 
     retirees have suffered a complete cutoff of vital medical and 
     life insurance benefits.
       (D) Many steel industry retirees were forced into 
     retirement as a result of the restructurings of the 1980's 
     and 1990's, and then, as a second blow, recently lost their 
     retiree medical insurance.
       (E) Recent steel imports have pushed steel prices to such 
     record lows that surviving American steelmakers face imminent 
     financial collapse, and these firms employ over 185,000 
     workers in family-supporting jobs and provide crucial medical 
     coverage to hundreds of thousands of retirees and 
     beneficiaries.
       (F) As American steel companies continue to weaken or fail, 
     a very different trend is underway in other countries where 
     governments shoulder a substantial portion of retirement 
     costs and foreign steelmakers are now merging into companies 
     of unprecedented size and market influence.
       (G) If the American steel industry is to survive and 
     compete, it must transform itself from a group of relatively 
     small producers into a consolidated market force.
       (H) For many American steel companies, the ability to 
     consolidate is undermined by the burden of retiree health and 
     life insurance obligations.
       (2) Purpose.--It is the purpose of this Act to ensure 
     that--
       (A) retired steelworkers receive medical and life insurance 
     coverage, and
       (B) the American steel industry can continue to provide 
     livelihoods to tens of thousands of American workers, their 
     families, and communities through the receipt of assistance 
     in consolidating its position in world steel markets.

     SEC. 2. ESTABLISHMENT OF STEEL INDUSTRY RETIREE BENEFITS 
                   PROTECTION PROGRAM.

       The Trade Act of 1974 is amended by adding at the end the 
     following new title:

     ``TITLE IX--PROTECTION FOR STEEL INDUSTRY RETIREMENT BENEFITS

``Subtitle A. Definitions.
``Subtitle B. Steel Industry Retiree Benefits Protection Program.
``Subtitle C. Steel Industry Legacy Relief Trust Fund.

                       ``Subtitle A--Definitions

``Sec. 901. Definitions.

     ``SEC. 901. DEFINITIONS.

       ``(a) Terms Relating to Benefits Program.--For purposes of 
     this title--
       ``(1) Retiree benefits program.--The term `retiree benefits 
     program' means the Steel Industry Retiree Benefits Protection 
     Program established under this title to provide medical and 
     death benefits to eligible retirees and beneficiaries.
       ``(2) Steel retiree benefits.--
       ``(A) In general.--The term `steel retiree benefits' means 
     medical, surgical, or hospital benefits, and death benefits, 
     whether furnished through insurance or otherwise, which are 
     provided to retirees and eligible beneficiaries in accordance 
     with an employee benefit plan (within the meaning of section 
     3(3) of the Employee Retirement Income Security Act of 1974) 
     which--
       ``(i) is established or maintained by a qualified steel 
     company or an applicable acquiring company, and
       ``(ii) is in effect on or after January 1, 2000.

     Such term includes benefits provided under a plan without 
     regard to whether the plan is established or maintained 
     pursuant to a collective bargaining agreement.
       ``(B) Retiree.--
       ``(i) In general.--The term `retiree' means an individual 
     who has met any years of service or disability requirements 
     under an employee benefit plan described in subparagraph (A) 
     which are necessary to receive steel retiree benefits under 
     the plan.
       ``(ii) Certain retirees included.--An individual shall not 
     fail to be treated as a retiree because the individual--

       ``(I) retired before January 1, 2000, or
       ``(II) was not employed at the steelmaking assets of a 
     qualified steel company.

       ``(b) Terms Relating to Steel Companies.--For purposes of 
     this title--
       ``(1) Qualified steel company.--
       ``(A) In general.--The term `qualified steel company' means 
     any person which on January 1, 2000, was engaged in--
       ``(i) the production or manufacture of a steel mill 
     product,
       ``(ii) the mining or processing of iron ore or beneficiated 
     iron ore products, or
       ``(iii) the production of coke for use in a steel mill 
     product.
       ``(B) Transportation.--The term `qualified steel company' 
     includes any person which on January 1, 2000, was engaged in 
     the transportation of any steel mill product solely or 
     principally for another person described in subparagraph (A), 
     but only if such person and such other person are related 
     persons.
       ``(C) Successors in interest.--The term `qualified steel 
     company' includes any successor in interest of a person 
     described in subparagraph (A) or (B).
       ``(2) Steelmaking assets and steel mill products.--
       ``(A) Steelmaking assets.--The term `steelmaking assets' 
     means any land, building, machinery, equipment, or other 
     fixed assets located in the United States which, at any time 
     on or after January 1, 2000, have been used in the activities 
     described in subparagraph (A) or (B) of paragraph (1).
       ``(B) Steel mill product.--The term `steel mill product' 
     means any product defined by the American Iron and Steel 
     Institute as a steel mill product.
       ``(3) Acquiring company.--The term `acquiring company' 
     means any person which acquired on or after January 1, 2000, 
     steelmaking assets of a qualified steel company with respect 
     to which a qualifying event has occurred.
       ``(c) Other Definitions.--For purposes of this title--

[[Page S2845]]

       ``(1) Related person.--The term `related person' means, 
     with respect to any person, a person who--
       ``(A) is a member of the same controlled group of 
     corporations (within the meaning of section 52(a) of the 
     Internal Revenue Code of 1986) as such person, or
       ``(B) is under common control (within the meaning of 
     section 52(b) of such Code) with such person.
       ``(2) Secretary.--The term `Secretary' means the Secretary 
     of Commerce.
       ``(3) Trust fund.--The term `Trust Fund' means the Steel 
     Industry Legacy Relief Trust Fund established under subtitle 
     C.

    ``Subtitle B--Steel Industry Retiree Benefits Protection Program

``I. Establishment.
``II. Relief and assumption of liability, eligibility, and 
              certification.
``III. Program benefits.

                        ``PART I--ESTABLISHMENT

``Sec. 902. Establishment.

     ``SEC. 902. ESTABLISHMENT.

       ``There is established a Steel Industry Retiree Benefits 
     Protection program to be administered by the Secretary and 
     the Board of Trustees of the Trust Fund in accordance with 
     the provisions of this title for the purpose of providing 
     medical and death benefits to eligible retirees and eligible 
     beneficiaries certified as participants in the program under 
     part II.

    ``PART II--RELIEF AND ASSUMPTION OF LIABILITY, ELIGIBILITY, AND 
                             CERTIFICATION

``Sec. 911. Relief and assumption of liability.
``Sec. 912. Qualifying events.
``Sec. 913. Eligibility and certification of eligibility.

     ``SEC. 911. RELIEF AND ASSUMPTION OF LIABILITY.

       ``(a) In General.--If--
       ``(1) the Secretary certifies under section 912 that there 
     was a qualifying event with respect to a qualified steel 
     company,
       ``(2) the asset transfer requirements of subsection (b) are 
     met with respect to the qualifying event, and
       ``(3) the qualified steel company and any acquiring company 
     assumes their respective liability to make any contributions 
     required under subsection (c),

     then the United States shall assume liability for the 
     provision of steel retiree benefits for each eligible retiree 
     and eligible beneficiary certified for participation in the 
     retiree benefits program under section 913 (and the qualified 
     steel company, any predecessor or successor, and any related 
     person to such company, predecessor, or successor shall be 
     relieved of any liability for the provision of such 
     benefits). The United States shall be treated as satisfying 
     any liability assumed under this subsection if benefits are 
     provided to eligible retirees and eligible beneficiaries 
     under the retiree benefits program provided in part III.
       ``(b) Required Asset Transfers.--
       ``(1) In general.--The requirements of this subsection are 
     met if the qualified steel company and any applicable 
     acquiring company transfer to the Trust Fund all assets, as 
     determined in accordance with rules prescribed by the 
     Secretary, which, under the terms of an applicable collective 
     bargaining agreement, were required to be set aside under an 
     employee benefit plan or otherwise for the provision of the 
     steel retiree benefits the liability for which (determined 
     without regard to this subsection) is relieved by operation 
     of subsection (a). The assets required to be transferred 
     shall not include voluntary contributions, including 
     voluntary contributions made pursuant to a voluntary 
     employees beneficiary association trust, which are in excess 
     of the contributions described in the preceding sentence.
       ``(2) Determination.--The amount of the assets to be 
     transferred under paragraph (1) shall be determined at the 
     time of the certification under section 912 and shall include 
     interest from the time of the determination to the time of 
     transfer. Such amount shall be reduced by any payments from 
     such assets which are made after the determination by the 
     qualified steel company or applicable acquiring company for 
     the provision of steel retiree benefits for which such assets 
     were set aside and the liability for which (determined 
     without regard to this subsection) is relieved by operation 
     of subsection (a).
       ``(c) Contribution Requirements.--
       ``(1) Contributions based on ownership of steelmaking 
     assets.--
       ``(A) In general.--If there is a qualifying event certified 
     under section 912 with respect to a qualified steel company--
       ``(i) the qualified steel company shall assume the 
     obligation to pay, and
       ``(ii) if the qualified steel company transferred on or 
     after January 1, 2000, any of its steelmaking assets, the 
     qualified steel company and any acquiring company acquiring 
     such assets as part of (or after) a qualifying event shall 
     assume the obligation to pay,

     to the Trust Fund for each of the years in the 10-year period 
     beginning on the date of the qualifying event its ratable 
     share of the amount determined under subparagraph (B) with 
     respect to the steelmaking assets owned by such company or 
     person.
       ``(B) Amount of liability.--
       ``(i) In general.--The amount required to be paid under 
     subparagraph (A) for any year shall be equal to $5 per ton of 
     products described in section 901(b)(1)(A) attributable to 
     the steelmaking assets which are the subject of the 
     qualifying event and shipped to a person other than a related 
     person. If 2 or more persons own steelmaking capacity or 
     assets, the liability under this clause shall be allocated 
     ratably on the basis of their respective ownership interests. 
     The determination under this clause for any year shall be 
     made on the basis of shipments during the calendar year 
     preceding the calendar year in which such year begins.
       ``(ii) Reductions in liability.--The amount of any 
     liability under clause (i) for any year shall be reduced by 
     the amount of any assets transferred to the Trust Fund under 
     subsection (b), reduced by any portion of such amount applied 
     to a liability for any preceding year. If 2 or more persons 
     are liable under subparagraph (A) with respect to any 
     qualifying event, any reduction with respect to assets 
     transferred to the Trust Fund under subsection (b) shall be 
     allocated ratably among such persons on the basis of their 
     respective liabilities or in such other manner as such 
     persons may agree.
       ``(2) FASB liability in case of certain qualifying 
     events.--
       ``(A) In general.--If there is a qualifying event (other 
     than a qualified acquisition) with respect to a qualified 
     steel company, then, subject to the provisions of 
     subparagraphs (C) and (D), the qualified steel company shall 
     be liable for payment to the Trust Fund of the amount 
     determined under subparagraph (B). If a qualified acquisition 
     occurs after another qualifying event, such other qualifying 
     event shall be disregarded for purposes of this paragraph.
       ``(B) Amount of liability.--The amount determined under 
     this subparagraph shall be equal to the excess (if any) of--
       ``(i) the amount determined under the Financial Accounting 
     Standards Board Rule 106 as being equal to the present value 
     of the steel retiree benefits of eligible retirees and 
     beneficiaries of the qualified steel company the liability 
     for which (determined without regard to any modification 
     pursuant to section 1114 of title 11, United States Code) is 
     relieved under subsection (a), over
       ``(ii) the sum of--

       ``(I) the value of the assets transferred under subsection 
     (b) with respect to the retirees and beneficiaries, and
       ``(II) the present value of any payments (other than 
     payments determined under this subparagraph) to be made under 
     this subsection with respect to steelmaking assets of the 
     qualified steel company.

       ``(C) Discharges in bankruptcy.--The amount of any 
     liability under subparagraph (B) shall be reduced by the 
     portion of such liability which, in accordance with the 
     provisions of title 11, United States Code, is discharged in 
     any bankruptcy proceeding.
       ``(D) No liability if industry-wide election made.--If a 
     qualifying event occurs by reason of a qualified election 
     under section 912(d)(2)(B), then--
       ``(i) any liability that arose under this paragraph for any 
     qualifying event occurring before such election is 
     extinguished (and any payment of such liability shall be 
     refunded from the Trust Fund with interest), and
       ``(ii) no liability shall arise under this paragraph with 
     respect to the qualifying event occurring by reason of such 
     election or any subsequent qualifying event.
       ``(3) Joint and several liability.--Any related person of 
     any person liable for any payment under this subsection shall 
     be jointly and severally liable for the payment.
       ``(4) Time and manner of payment.--The Secretary shall 
     establish the time and manner of any payment required to be 
     made under this subsection, including the payment of 
     interest.

     ``SEC. 912. QUALIFYING EVENTS.

       ``(a) In General.--For purposes of this title, the term 
     `qualifying event' means any--
       ``(1) qualified acquisition,
       ``(2) qualified closing,
       ``(3) qualified election, and
       ``(4) qualified bankruptcy transfer.
       ``(b) Qualified Acquisition.--For purposes of this title, 
     the term `qualified acquisition' means any arms'-length 
     transaction or series of related transactions--
       ``(1) under which a person (whether or not a qualified 
     steel company) acquires by purchase, merger, stock 
     acquisition, or otherwise all or substantially all of the 
     steelmaking assets held by the qualified steel company as of 
     January 1, 2000, and
       ``(2) which occur on and after January 1, 2000, and before 
     the date which is 2 years after the date of the enactment of 
     this title.

     Such term shall not include any acquisition by a related 
     person.
       ``(c) Qualified Closing.--For purposes of this title--
       ``(1) In general.--The term `qualified closing' means--
       ``(A) the permanent cessation on or after January 1, 2000, 
     and before January 1, 2004, by a qualified steel company 
     operating under the protection of chapter 11 or 7 of title 
     11, United States Code, of all activities described in 
     subparagraph (A) or (B) of paragraph (1) of section 901(b), 
     or
       ``(B) the transfer on or after January 1, 2000, and before 
     January 1, 2004, by a qualified steel company operating under 
     the protection of chapter 11 or 7 of title 11, United States 
     Code, of all or substantially all of its steelmaking assets 
     to 1 or more persons other than related persons in an arms'-
     length transaction or series of related transactions which do 
     not constitute a qualified acquisition.
       ``(2) Companies in imminent danger of closure.--A qualified 
     closing of a qualified steel

[[Page S2846]]

     company operating under the protection of chapter 11 or 7 of 
     title 11, United States Code, shall be treated as having 
     occurred if the company--
       ``(A) meets the acquisition effort requirements of 
     paragraph (3),
       ``(B) establishes to the satisfaction of the Secretary 
     that--
       ``(i) it is in imminent danger of becoming a closed 
     company, or
       ``(ii) in the case of a company operating under protection 
     of chapter 11 of title 11, United States Code, it is unable 
     to reorganize without the relief provided under this title, 
     and
       ``(C) elects, in such manner as the Secretary prescribes, 
     at any time after the date of the enactment of this title and 
     before the date which is 2 years after the date of the 
     enactment of this title, to avail itself of the relief 
     provided under this title.
       ``(3) Acquisition effort requirements.--
       ``(A) In general.--The requirements of this paragraph are 
     met by a qualified steel company if--
       ``(i) the company files with the Secretary within 10 days 
     of the date of the enactment of this title--

       ``(I) a notice of intent to be acquired, and
       ``(II) a description of the actions the company will 
     undertake to have its steelmaking assets acquired in a 
     qualified acquisition, and

       ``(ii) the company at all times after the filing under 
     clause (i) and the date which is 2 years after the date of 
     the enactment of this title (or, if earlier, the date on 
     which the requirement of paragraph (2)(B) is satisfied) makes 
     a continuing, good faith effort to have its steelmaking 
     assets acquired in a qualified acquisition.
       ``(B) Good faith effort.--A continuing, good faith effort 
     under subparagraph (A)(ii) shall include--
       ``(i) the active marketing of a company's steelmaking 
     assets through the retention of an investment banker, the 
     preparation and distribution of offering materials to 
     prospective purchasers, allowing due diligence and 
     investigatory activities by prospective purchasers, the 
     active and good faith consideration of all expressions of 
     interest by prospective purchasers, and any other affirmative 
     action designed to result in a qualified acquisition of a 
     company's steelmaking assets, and
       ``(ii) a demonstration to the Secretary by the company that 
     no bona fide and fair offer which would have resulted in a 
     qualified acquisition of the company's steelmaking assets has 
     been unreasonably refused.
       ``(d) Qualified Election.--For purposes of this title--
       ``(1) In general.--The term `qualified election' means an 
     election by a qualified steel company operating under the 
     protection of chapter 11 or 7 of title 11, United States 
     Code, meeting the acquisition effort requirements of 
     subsection (c)(3) to transfer its obligations for steel 
     retiree benefits to the retiree benefit program. Such an 
     election shall be made not earlier than the date which is 2 
     years after the date of the enactment of this title, and in 
     such manner as the Secretary may prescribe.
       ``(2) Industry-wide election.--Notwithstanding paragraph 
     (1), a qualified election shall be treated as having occurred 
     with respect to a qualified steel company (whether or not 
     operating under the protection of chapter 11 or 7 of title 
     11, United States Code) if--
       ``(A) the Secretary determines that at least 200,000 
     eligible retirees and beneficiaries have been certified under 
     section 913 for participation in the retiree benefits 
     program, and
       ``(B) the qualified steel company elects to avail itself of 
     the relief provided under this title on or after the date of 
     the determination under subparagraph (A).
       ``(e) Qualified Bankruptcy Transfer.--For purposes of this 
     title, the term `qualified bankruptcy transfer' means any 
     transaction or series of transactions--
       ``(1) under which the qualified steel company, operating 
     under the protection of chapter 11 or 7 of title 11, United 
     States Code, transfers by any means (including but not 
     limited to a plan of reorganization) its control over at 
     least 30 percent of the production capacity of its 
     steelmaking assets to 1 or more persons which are not related 
     persons of such company,
       ``(2) which are not part of a qualified acquisition or 
     qualified closing of a qualified steel company, and
       ``(3) which occur on and after January 1, 2000, and before 
     January 1, 2004.
       ``(f) Certification.--
       ``(1) In general.--The Secretary shall certify a qualifying 
     event with respect to a qualified steel company if the 
     Secretary determines that the requirements of this title are 
     met with respect to such event and that the asset transfer 
     and contribution requirements of section 911 will be met.
       ``(2) Time for decision.--The Secretary shall make any 
     determination under this subsection as soon as possible after 
     a request is filed (and in the case of a request for 
     certification as a qualified acquisition filed at least 60 
     days before the proposed date of the acquisition, before such 
     proposed date).
       ``(3) Eligibility to file request.--A request for 
     certification under this subsection may be made by the 
     qualified steel company or any labor organization acting on 
     behalf of retirees of such company.

     ``SEC. 913. ELIGIBILITY AND CERTIFICATION.

       ``(a) Retirees.--
       ``(1) In general.--Any individual who is a retiree of a 
     qualified steel company with respect to which the Secretary 
     has certified under section 912 that a qualifying event has 
     occurred shall be treated as an eligible retiree for purposes 
     of this title if--
       ``(A) the individual was receiving steel retiree benefits 
     under an employee benefit plan described in section 
     901(a)(2)(A) as of the date of the qualifying event, or
       ``(B) the individual was eligible to receive such benefits 
     on such date but was not receiving such benefits because the 
     plan ceased to provide such benefits.
       ``(2) Certain individuals included.--An individual shall be 
     treated as an eligible retiree under paragraph (1) if the 
     individual--
       ``(A) was an employee of the qualified steel company before 
     a qualified acquisition,
       ``(B) became an employee of the acquiring company as a 
     result of the acquisition, and
       ``(C) voluntarily retires within 3 years of the 
     acquisition.
       ``(b) Beneficiaries.--An individual shall be treated as an 
     eligible beneficiary for purposes of this title if the 
     individual is the spouse, surviving spouse, or dependent of 
     an eligible retiree (or an individual who would have been an 
     eligible retiree but for the individual's death before the 
     date of the qualifying event).
       ``(c) Certification of Eligible Retirees and 
     Beneficiaries.--
       ``(1) In general.--The Board of Trustees of the Trust Fund 
     shall certify an individual as an eligible retiree or 
     eligible beneficiary if the individual meets the requirements 
     of this section.
       ``(2) Eligibility to file request.--A request for 
     certification under this subsection may be filed by any 
     individual seeking to be certified under this subsection, the 
     qualified steel company, an acquiring company, a labor 
     organization acting on behalf of retirees of such company, or 
     a committee appointed under section 1114 of title 11, United 
     States Code.
       ``(d) Records.--A qualified steel company, an acquiring 
     company, and any successor in interest shall on and after the 
     date of the enactment of this title maintain and make 
     available to the Secretary and the Board of Trustees of the 
     Trust Fund, all records, documents, and materials (including 
     computer programs) necessary to make the certifications under 
     this section.

                      ``PART III--PROGRAM BENEFITS

``Sec. 921. Program benefits.

     ``SEC. 921. PROGRAM BENEFITS.

       ``(a) General Rule.--Each eligible retiree and eligible 
     beneficiary who is certified for participation in the retiree 
     benefits program shall be entitled--
       ``(1) to receive health care benefits coverage described in 
     subsection (b), and
       ``(2) in the case of an eligible retiree, payment of $5,000 
     death benefits coverage to the beneficiary of the retiree 
     upon the retiree's death.
       ``(b) Health Care Benefits Coverage.--
       ``(1) In general.--The Board of Trustees of the Trust Fund 
     shall establish health care benefits coverage under which 
     eligible retirees and beneficiaries are provided benefits for 
     health care items and services that are substantially the 
     same as the benefits offered as of January 1, 2002, under the 
     Blue Cross/Blue Shield Standard Plan provided under the 
     Federal Employees Health Benefit Program under chapter 89 of 
     title 5, United States Code, to Federal employees and 
     annuitants. In providing the benefits under such program, the 
     secondary payer provisions and the provisions relating to 
     benefits provided when an individual is eligible for benefits 
     under the medicare program under title XVIII of the Social 
     Security Act that are applicable under such Plan shall apply 
     in the same manner as such provisions apply to Federal 
     employees and annuitants under such Plan.
       ``(2) Contracting authority.--The Board of Trustees of the 
     Trust Fund shall have the authority to enter into such 
     contracts as are necessary to carry out the provisions of 
     this subsection, including contracts necessary to ensure 
     adequate geographic coverage and cost control. The Board of 
     Trustees may use the authority under this subsection to 
     establish preferred provider organizations or other 
     alternative delivery systems.
       ``(3) Premiums, deductibles, and cost sharing.--The Board 
     of Trustees of the Trust Fund shall establish premiums, 
     deductibles, and cost sharing for eligible retirees and 
     beneficiaries provided health care benefits coverage under 
     paragraph (1) which are substantially the same as those 
     required under the Blue Cross/Blue Shield Standard Plan 
     described in paragraph (1).

         ``Subtitle C--Steel Industry Legacy Relief Trust Fund

     ``SEC. 931. STEEL INDUSTRY LEGACY RELIEF TRUST FUND.

       ``(a) Creation of Trust Fund.--There is established in the 
     Treasury of the United States a trust fund to be known as the 
     Steel Industry Legacy Relief Trust Fund, consisting of such 
     amounts as may be appropriated to the Trust Fund as provided 
     in this section.
       ``(b) Transfers to Trust Fund.--
       ``(1) In general.--There are appropriated to the Trust Fund 
     amounts equivalent to--
       ``(A) tariffs on steel mill products received in the 
     Treasury under title II of this Act,
       ``(B) amounts received in the Treasury from asset transfers 
     and contributions under section 911,

[[Page S2847]]

       ``(C) amounts credited to the Trust Fund under section 
     9602(b) of the Internal Revenue Code of 1986, and
       ``(D) the premiums paid by retirees under the program.
       ``(2) Authorization of appropriations.--There is authorized 
     to be appropriated to the Trust Fund each fiscal year an 
     amount equal to the excess (if any) of--
       ``(A) expenditures from the Trust Fund for the fiscal year, 
     over
       ``(B) the assets of the Trust Fund for the fiscal year 
     without regard to this paragraph.
       ``(c) Expenditures.--Amounts in the Trust Fund shall be 
     available only for purposes of making expenditures--
       ``(1) to meet the obligations of the United States with 
     respect to liability for steel retiree benefits transferred 
     to the United States under this title, and
       ``(2) incurred by the Secretary and the Board of Trustees 
     in the administration of this title.
       ``(d) Board of Trustees.--
       ``(1) In general.--The Trust Fund and the retiree benefits 
     program shall be administered by a Board of Trustees, 
     consisting of--
       ``(A) 2 individuals designated by agreement of the 5 
     qualified steel companies which, as of the date of the 
     enactment of this title--
       ``(i) are conducting activities described in subparagraph 
     (A) or (B) of section 901(b)(1), and
       ``(ii) have the largest number of retirees, and
       ``(B) 2 individuals designated by the United Steelworkers 
     of America in consultation with the Independent Steelworkers 
     Union, and
       ``(C) 3 individuals designated by individuals designated 
     under subparagraphs (A) and (B).
       ``(2) Duties.--Except for those duties and responsibilities 
     designated to the Secretary, the Board of Trustees shall have 
     the responsibility to administer the Trust Fund and the 
     retiree benefits program, including--
       ``(A) enrolling eligible retirees and beneficiaries under 
     the program,
       ``(B) procuring the medical services to be provided under 
     the program,
       ``(C) entering into contracts, leases, or other 
     arrangements necessary for the implementation of the program,
       ``(D) implementing cost-containment measures under the 
     program,
       ``(E) collecting revenues and enforcing claims and rights 
     of the program and the Trust Fund,
       ``(F) making disbursements as necessary under the program, 
     and
       ``(G) acquiring and maintaining such records as may be 
     necessary for the administration and implementation of the 
     program.
       ``(3) Report.--The Board of Trustees report to Congress 
     each year on the financial condition and the results of the 
     operations of the Trust Fund during the preceding fiscal year 
     and on its expected condition and operations during the next 
     2 fiscal years. Such report shall be printed as a House 
     document of the session of Congress to which the report is 
     made.
       ``(e) Transfer Investment of Assets.--Sections 9601 and 
     9602(b) of the Internal Revenue Code of 1986 shall apply to 
     the Trust Fund.''

 Mr. SPECTER. Mr President, I have sought recognition at this 
time to comment briefly on legislation that I am pleased to cosponsor 
with my colleague, Senator Rockefeller. That legislation, the ``Steel 
Industry Retiree Benefits Protection Act of 2002,'' would set the 
Nation on a path of assuring the retirement health care benefits of the 
Nation's retired steelworkers and their dependants, and the survival of 
a domestic integrated steel industry. I crafted this bill jointly with 
Senator Rockefeller with extensive consultation by the integrated steel 
industry and representatives of the United Steelworkers of America. I 
am pleased to note that labor and management have joined in a common 
effort to resolve the near-intractable problems that face the industry 
today, and I thank them for that spirit of cooperation and compromise.
  The reasons for this legislation are succinctly stated in the 
findings set forth in the preamble of the bill. The domestic steel 
industry has been forced to compete over the last 30 years in an 
international marketplace in which foreign governments have subsidized 
both domestic production and employee healthcare costs and, 
simultaneously, stimulated the creation and maintenance of excess world 
steelmaking capacity. During the 1980's and 1990's, the steel industry 
adapted, but literally hundreds of thousands of steel workers were 
forced into early retirement as the industry streamlined productions 
methods. Since 1997, the situation has worsened, due to the unfair 
practices of overseas producers and governments and a resultant glut of 
foreign imports, to the point that 32 American steel companies have had 
to resort to bankruptcy protection, causing 45,000 steelworkers to lose 
their jobs and over 100,000 steel industry retirees to lose vital 
medical insurance benefits. Record-low steel prices place remaining 
steel producers, and their workers and retirees, in an increasingly 
untenable position.
  A clear consensus now exists that the only way a domestic integrated 
steel industry can survive is through consolidation. It is true that 
the ranks of U.S. integrated producers have been decimated; one need 
only drive through Pennsylvania to see ample evidence of that. But a 
domestic industry does indeed survive. It will continue to survive only 
if there is further consolidation and the emergence of a relatively few 
domestic companies with the muscle to compete in a global marketplace 
with subsidized foreign behemoths. But there is a significant 
impediment to such consolidation: the so-called ``legacy costs'' of 
domestic producers which might otherwise be acquired and consolidated 
into larger, more efficient U.S. operations.
  To summarize, a relatively healthy domestic steel producer might find 
the acquisition, and the continued operation, of a weaker steel 
company's manufacturing operations to be quite attractive but for one 
major problem: such operations typically are owned by companies which 
are weighed down by the health care costs of prior generations of 
retirees, retirees who are relatively young due to the premature 
withdrawal of workers from the rolls due to downsizing in the 1980's 
and 1990's. Potential acquirers of such assets have ``legacy costs'' of 
their own to deal with; they cannot afford to assume those of their 
former competitors, a result that would be unavoidable were they to 
simply purchase and consolidate the assets of former competitors. If we 
want consolidation to happen, and it is unquestionably in the Nation's 
self-interest that it happen; few would dispute that the common defense 
requires a viable domestic steel industry, potential acquirers of these 
assets must gain relief from the ``legacy cost'' obligations that would 
otherwise run with the acquired assets.
  My colleagues might ask: if an acquiring steel company is relieved of 
these obligations, who would take them on? The answer is this: a 
Federally-sponsored trust fund, financed with steel tariff receipts; 
funds previously placed in trust by acquired companies for retiree 
health and life insurance benefits; fees to be paid by acquiring 
companies; and, yes, as necessary to cover shortfalls, appropriations. 
To those who say the public cannot take on these obligations, I offer 
the following logic: when steel producers go under, as they will if we 
do not act, the public may very much face exposure to these obligations 
via the Medicare and Medicaid programs; taking them on before the 
companies go under will at least assure that the defense-critical steel 
industry survives. It is an unpleasant choice we face, but it is one 
which we must face: we may either assume ``legacy cost'' obligations 
now and save a vital industry; or we can wait and watch a vital 
industry die and face up to ``legacy costs'' later.
  I strongly appeal to my colleagues in the Senate to seriously 
consider this Hobson's choice. If they do, I trust they will come to 
the same conclusion that I have: we must save this industry by clearing 
the way for the consolidation that will be necessary to compete in the 
international market of the future. And we must protect those who have 
lost, or may yet lose, their health care benefits due to unfair 
competition from abroad. The steelworkers of America, many from the 
``Greatest Generation'' and from my home, Pennsylvania, built the 
Nation in the 20th Century. They made the United States the world's 
only superpower. We need to assure that their post-retirement years are 
secure.
                                 ______