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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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