[House Report 108-328]
[From the U.S. Government Publishing Office]
108th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 108-328
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COAL ACCOUNTABILITY AND RETIRED EMPLOYEE ACT FOR THE 21ST CENTURY
_______
October 28, 2003.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Pombo, from the Committee on Resources, submitted the following
R E P O R T
[To accompany H.R. 313]
[Including cost estimate of the Congressional Budget Office]
The Committee on Resources, to whom was referred the bill
(H.R. 313) to modify requirements relating to allocation of
interest that accrues to the Abandoned Mine Reclamation Fund,
having considered the same, report favorably thereon without
amendment and recommend that the bill do pass.
PURPOSE OF THE BILL
The purpose of H.R. 313 to modify requirements relating to
allocation of interest that accrues to the Abandoned Mine
Reclamation Fund.
BACKGROUND AND NEED FOR LEGISLATION
The Surface Mining Control and Reclamation Act of 1977
(Public Law 95-87; 30 U.S.C. 1201 et seq.) established an
abandoned coal mine reclamation (AML) fund supported by a fee
on domestically produced coal. The fee was originally slated to
expire in 1992, but Congress has twice extended the fee and it
is now slated to expire on September 30, 2004 (Public Law 102-
486, Sec. 19143; 30 U.S.C. 1232).
The Coal Act of 1992 established the United Mine Workers of
America (UMWA) Combined Benefits Fund (CBF) to pay for health
care benefits for retired mine workers. Coal companies and
companies that were coal companies and were signatories to
retiree benefit programs pay for the health care premiums of
these retirees. However, an ``unassigned beneficiaries'' class
of UMWA retirees exists where no entity exists to pay their
benefits. To protect the solvency of the CBF, Congress opted to
allow the transfer to the CBF of not more than $70 million
annually of interest from the unappropriated balance of the AML
trust fund for the unassigned beneficiaries. This transfer,
which is not subject to appropriation, is made after an annual
audit calculates the necessary amount. The combination of
rising health care costs and court decisions that have expanded
the pool of unassigned beneficiaries is putting stress on the
solvency of the CBF.
H.R. 313 would lift the current $70 million limitation on
the amount of interest that can be transferred to the CBF. It
would not allow transfers of the principal in the AML fund to
be transferred to the CBF.
COMMITTEE ACTION
H.R. 313 was introduced on January 8, 2003, by Congressman
Nick J. Rahall (D-WV). The bill was referred to the Committee
on Resources and within the Committee to the Subcommittee on
Energy and Mineral Resources. On October 1, 2003, the Full
Resources Committee met to consider the bill. The Subcommittee
was discharged from further consideration of the bill by
unanimous consent. No amendments were offered and the bill was
then ordered favorably reported to the House of Representatives
by unanimous consent.
COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS
Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of
rule XIII of the Rules of the House of Representatives, the
Committee on Resources' oversight findings and recommendations
are reflected in the body of this report.
CONSTITUTIONAL AUTHORITY STATEMENT
Article I, section 8 of the Constitution of the United
States grants Congress the authority to enact this bill
COMPLIANCE WITH HOUSE RULE XIII
1. Cost of Legislation. Clause 3(d)(2) of rule XIII of the
Rules of the House of Representatives requires an estimate and
a comparison by the Committee of the costs which would be
incurred in carrying out this bill. However, clause 3(d)(3)(B)
of that Rule provides that this requirement does not apply when
the Committee has included in its report a timely submitted
cost estimate of the bill prepared by the Director of the
Congressional Budget Office under section 402 of the
Congressional Budget Act of 1974.
2. Congressional Budget Act. As required by clause 3(c)(2)
of rule XIII of the Rules of the House of Representatives and
section 308(a) of the Congressional Budget Act of 1974, this
bill does not contain any new budget authority, credit
authority, or an increase or decrease in revenues or tax
expenditures. According to the Congressional Budget Office
(CBO), the transfer of funds from the AML to the CBF has no net
budgetary effect. However, because of increased payments from
the CBF, federal Medicaid spending would decrease by about $2
million per year beginning in 2005. From this, CBO concludes
there would be a net increase in direct spending of $454
million over the 2005-2013 time period if additional
appropriations for other purposes are not made from the AML
fund after 2003.
3. General Performance Goals and Objectives. This bill does
not authorize funding and therefore, clause 3(c)(4) of rule
XIII of the Rules of the House of Representatives does not
apply.
4. Congressional Budget Office Cost Estimate. Under clause
3(c)(3) of rule XIII of the Rules of the House of
Representatives and section 403 of the Congressional Budget Act
of 1974, the Committee has received the following cost estimate
for this bill from the Director of the Congressional Budget
Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, October 16, 2003.
Hon. Richard W. Pombo,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 313, the Coal
Accountability and Retired Employee Act for the 21st Century.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Tom Bradley.
Sincerely,
Douglas Holtz-Eakin,
Director.
Enclosure.
H.R. 313--Coal Accountability and Retired Employee Act for the 21st
Century
Summary: H.R. 313 would require the Office of Surface
Mining to transfer any remaining interest credited to the
Abandoned Mine Reclamation (AML) Fund to the United Mine
Workers of America Combined Benefit Fund (CBF) in the case of a
deficit of net assets in that fund (that is, when expenditures
exceed revenues in a particular year). CBO estimates that the
CBF will record a deficit of net assets in 2004 and in each
year thereafter.
If the bill were enacted, CBO estimates that an additional
$67 million in 2004 and about $500 million over the 2004-2013
period would be transferred to the CBF, assuming that the
reclamation fees paid by coal companies to the AML Fund expire
in 2004 as scheduled and that no discretionary appropriations
are made from the fund after fiscal year 2003. By themselves,
the transfers, from one federal budget account to another,
would not affect the budget totals. The transfers would,
however, provide additional resources to the CBF, which would
otherwise run out of money to pay health benefits to retired
mine workers and their dependents. CBO estimates that those
transfers would have no effect on benefit payments in 2004 and
would result in additional benefit payments of $472 million
over the 2005-2013 period.
In addition, because of the increased payments from the
CBF, federal Medicaid spending would decline by about $2
million a year beginning in 2005. Therefore, CBO estimates that
the net change in direct spending would be an increase of $454
million over the 2005-2013 period.
H.R. 313 contains no private-sector or intergovernmental
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would reduce Medicaid spending by state governments.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 313 is shown in Table 1. The costs of
this legislation fall within budget function 550 (health).
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By fiscal year, in millions of dollars--
---------------------------------------------------------------------
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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CHANGES IN DIRECT SPENDING
Additional Spending from the CBF:
Estimated Budget Authority............ 0 69 64 60 54 49 46 45 43 41
Estimated Outlays..................... 0 69 64 60 54 49 46 45 43 41
Federal Share of Medicaid:
Estimated Budget Authority............ 0 -2 -2 -2 -2 -2 -2 -2 -2 -2
Estimated Outlays..................... 0 -2 -2 -2 -2 -2 -2 -2 -2 -2
Net Effect on Federal Spending:
Estimated Budget Authority............ 0 67 62 58 52 47 44 43 41 39
Estimated Outlays..................... 0 67 62 58 52 47 44 43 41 39
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Basis of estimate: The Abandoned Mine Reclamation Fund is
supported by a fee on domestically produced coal, and a portion
of the interest credited to that fund each year is transferred
to the Combined Benefit Fund to provide health benefits for
certain retired mine workers and their dependents. Under
current law, the transfer of interest earnings is capped at $70
million a year. H.R. 313 would remove that cap and would allow
interest transfers to be made to offset any deficits in the
CBF. CBO estimates that the CBF will run a deficit of more than
$500 million over the 2004-2013 period because the cost of
providing health benefits has been growing more rapidly than
the premiums collected by the fund. If the bill is enacted, CBO
estimates that an additional $67 million would be transferred
in 2004 to cover deficits in 2003 and 2004.
Although the CBF is privately administered, revenues to the
fund and outlays from the fund are recorded on the federal
budget. The payments to the fund--health insurance premiums
paid by certain coal producers--are mandated by the government,
and the benefits paid by the fund are a federal entitlement
program. Therefore, the transfer of funds from the AML to the
CBF is an intragovernmental transaction and, by itself, has no
net budgetary effect.
The budgetary impact of H.R. 313 would not be the transfer
itself, but the additional benefits that would be paid from the
CBF as a result of the transfer. In the event of a deficit, the
trustees of the CBF will first try to balance the fund by
reducing spending on items and services other than health
benefits. But if the deficit is large enough, they will have to
cut benefits. CBO estimates that the fund will have to reduce
benefits starting in 2005 and will need to cut $472 million in
benefits over the 2005-2013 period under current law--that is,
with transfers limited to $790 million a year.
This cost estimate assumes that no appropriations are made
from the AML Fund after 2003, and that the fund receives no
additional income after 2004 from taxes on companies producing
coal. (Under current law, those taxes expire on September 30,
2004.) On that basis, CBO estimates that there would be enough
interest available in the AML Fund to cover net deficits in the
CBF so that no benefits would be cut through 2013 if H.R. 313
were enacted. Thus, the transfer of interest from the AML Fund
to cover net deficits in the CBF would enable the CBF to avoid
reducing benefits, and therefore, would increase direct
spending by $472 million over the 2005-2013 period.
The result would be different if additional appropriations
for other purposes were made from the AML Fund after 2003. If
appropriations continue at the 2003 level (without extension of
the taxes), the AML Fund would gradually be depleted and the
sums available for transfer to the CBF would decline over time.
After a few years, benefit payments would have to be reduced.
Under that scenario, enactment of H.R. 313 would not add to
aggregate spending over the 2005-2013 period.
For beneficiaries who are also enrolled in Medicaid, a loss
of benefits from the CBF would shift costs to the Medicaid
program. Because this legislation would eliminate the need to
reduce health benefits paid from the CBF, it would reduce the
health care costs that would have to be paid by Medicaid. CBO
estimates that this change would decrease federal Medicaid
spending by $2 million in 2005 and $18 million over the 2005-
2013 period.
Intergovernmental and private-sector impact: This bill
contains no new intergovernmental or private-sector mandates as
defined in UMRA. Because additional resources in the Combined
Benefit Fund would provide health benefits to eligible
beneficiaries, Medicaid spending would decrease. Consequently,
CBO estimates that states' share of those savings would total
about $1 million in 2005 and $14 million over the 2005-2013
period.
Estimate prepared by: Federal Costs: AML and CBF Funds--Tom
Bradley; Medicaid--Eric Rollins; Impact on State, Local, and
Tribal Governments: Leo Lex; Impact on the Private Sector:
Cecil McPherson.
Estimate Approved by: Robert A. Sunshine, Assistant
Director for Budget Analysis.
COMPLIANCE WITH PUBLIC LAW 104-4
This bill contains no unfunded mandates.
PREEMPTION OF STATE, LOCAL OR TRIBAL LAW
This bill is not intended to preempt any State, local or
tribal law.
CHANGES IN EXISTING LAW
If enacted, this bill would make no changes in existing
law.