To resolve the structural indebtedness of the Black Lung Disability Trust Fund, and for other purposes.

September 27, 2005

Mr. LEWIS of Kentucky introduced the following bill; which was referred to the Committee on Ways and Means

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 $8,700,000,000, 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) 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.'.

END