To amend the Internal Revenue Code of 1986 to protect the health benefits of steel industry retirees by expanding the availability of the refundable tax credit to the health insurance costs paid by former employers.

November 21, 2003

Mr. ENGLISH (for himself and Mr. CARDIN) introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to protect the health benefits of steel industry retirees by expanding the availability of the refundable tax credit to the health insurance costs paid by former employers.

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 `Steel Industry Retiree Benefits Protection Act of 2003'.

SEC. 2. EXTENSION OF REFUNDABLE CREDIT TO FORMER EMPLOYERS FOR HEALTH INSURANCE PAYMENTS FOR CERTAIN STEEL INDUSTRY RETIREES.

(a) IN GENERAL- Subsection (a) of section 35 of the Internal Revenue Code of 1986 is amended to read as follows:

`(a) IN GENERAL-

`(1) CREDIT ALLOWED TO ELIGIBLE INDIVIDUALS- In the case of an individual, there shall be allowed as a credit against the tax imposed by subtitle A an amount equal to 65 percent of the amount paid by the taxpayer for coverage of the taxpayer and qualifying family members under qualified health insurance for eligible coverage months beginning in the taxable year.

`(2) CREDIT ALLOWED FOR PAYMENTS FOR ELIGIBLE STEEL INDUSTRY RETIREES- In the case of a qualified steel company, there shall be allowed as a credit against the tax imposed by subtitle A an amount equal to 65 percent of the amount paid during the taxable year by the qualified steel company for qualifying coverage of an eligible steel industry retiree and qualifying family members under qualified health insurance.

For purposes of paragraphs (1) and (2), amounts paid for coverage shall not include any premiums paid for the Medicare supplemental insurance program established under part B of title XVIII of the Social Security Act.'.

(b) QUALIFYING COVERAGE- Subsection (g) of section 35 of such Code (relating to special rules) is amended by redesignating paragraph (9) as paragraph (10) and inserting after paragraph (8) the following new paragraph:

`(9) QUALIFYING COVERAGE- For purposes of subsection (a)(2)--

`(A) IN GENERAL- Coverage shall not be treated as qualifying coverage unless at least 50 percent of the cost of such coverage for all eligible steel industry retirees who are retired from the applicable qualified steel company, and qualifying family members, determined on a combined basis, for such taxable year is paid or incurred by such qualified steel company.

`(B) SPECIAL RULE RELATING TO COLLECTIVE BARGAINING- Subparagraph (A) may be satisfied separately with respect to coverage provided to eligible steel industry retirees pursuant to a collective bargaining agreement.'.

(c) DEFINITION OF ELIGIBLE STEEL INDUSTRY RETIREE-

(1) IN GENERAL- Subsection (c) of section 35 of such Code is amended by adding at the end the following new paragraph:

`(5) ELIGIBLE STEEL INDUSTRY RETIREE-

`(A) IN GENERAL- The term `eligible steel industry retiree' means, with respect to any month, any individual who--

`(i) is a retiree of a qualified steel company, and

`(ii) is receiving retiree health benefits in accordance with an employee benefit plan (within the meaning of section 3 (3) of the Employee Retirement Income Security Act of 1974) which is established, maintained, or contributed to by the retiree's former employer and is in effect on or after January 1, 2000, or is no longer receiving such benefits as a result of the termination of coverage under such benefit plan on or after January 1, 2000, pursuant to an order of bankruptcy court, by operation of bankruptcy law, or by agreement with an authorized representative as provided in section 1114 of title 11, United States Code.

`(B) RETIREE- For purposes of this paragraph, the term `retiree' means, with respect to a qualified steel company, an individual (including any eligible surviving spouse of an individual) who has met any years of service or disability requirements under an employee benefit plan described in subparagraph (A)(ii) which are necessary to receive retiree health benefits under the plan, and at least 50 percent of whose years of service were performed in the United States on behalf of a qualified steel company.

`(C) QUALIFIED STEEL COMPANY- The term `qualified steel company' means--

`(i) a person who was engaged on or before January 1, 2003, 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, or

`(ii) a labor organization that, in the aggregate at one or more qualified steel companies, represents at least 10,000 employees.

`(D) QUALIFIED STEEL COMPANY- The term `qualified steel company' includes any person who, on or before January 1, 2003, was engaged in the transportation of any steel product or iron ore products solely or principally for another qualified steel company described in the preceding sentence, but only if such person and such other person bear a relationship to each other specified in section 267(b).'.

(2) CONFORMING AMENDMENTS-

(A) Paragraph (1) of section 35(c) of such Code is amended by striking `and' at the end of subparagraph (B), by striking the period at the end of subparagraph (C) and inserting `, and', and by adding the following new subparagraph:

`(D) an eligible steel industry retiree.'.

(B) Paragraph (1) of section 35(d) of such Code is amended--

(i) in subparagraph (A) by inserting `, or the eligible steel industry retiree's,' after `taxpayer's', and

(ii) in subparagraph (B) by inserting `or the eligible steel industry retiree' after `taxpayer'.

(d) ADDITION OF STEEL RETIREE HEALTH BENEFITS TO DEFINITION OF QUALIFIED HEALTH INSURANCE- Paragraph (1) of section 35(e) of such Code is amended by adding at the end the following new subparagraphs:

`(K) Coverage under an employee benefit plan of a qualified steel company or coverage funded by a steel industry retiree benefits health trust.

`(L) In the case of an eligible steel industry retiree, coverage under a medicare supplemental policy (as defined in section 1882(g)(1) of the Social Security Act), Medicare+Choice plan (as defined in part C of title XVIII of such Act), and similar plans.'.

(e) EXCEPTION FROM SPECIFIED COVERAGE RULE FOR STEEL INDUSTRY RETIREES- Subsection (f) of section 35 of such Code is amended by adding at the end the following flush sentence: `Paragraph (2) shall not apply in the case of a credit under this section otherwise allowable to an eligible steel industry retiree and qualifying family members of such retiree.'.

(f) SPECIAL RULE FOR QUALIFIED STEEL COMPANY PAYMENTS TO A STEEL INDUSTRY RETIREE HEALTH BENEFITS TRUST- Subsection (g) of section 35 of such Code, as amended by subsection (b), is further amended by adding at the end the following new paragraph:

`(10) TREATMENT OF PAYMENTS BY A QUALIFIED STEEL COMPANY TO A STEEL INDUSTRY RETIREE HEALTH BENEFITS TRUST- For purposes of this section--

`(A) IN GENERAL- Amounts paid by a qualified steel company to a steel industry retiree health benefits trust shall be treated as amounts paid for qualifying coverage for purposes of subsection (a)(2) (determined without regard to paragraph (9)).

`(B) STEEL INDUSTRY RETIREE HEALTH BENEFITS TRUST- The term `steel industry retiree health benefits trust' means a trust established for the purpose of paying health and death benefits to eligible steel industry retirees and qualifying family members either pursuant to section 501(c)(9) or in connection with the acquisition by a qualified steel company of another qualified steel company or of a substantial portion of the assets of another qualified steel company.'.

(g) OTHER CONFORMING AMENDMENTS-

(1) Section 35(g)(1) of such Code is amended by striking `subsection (a)' and inserting `subsection (a)(1)'.

(2) Section 35(g)(2) of such Code is amended by striking `162(l) or 213' and inserting `162(l), 213, or 419'.

(h) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2003.

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