S 910 IS

To provide certain safeguards with respect to the domestic steel industry.

May 17, 2001

Mr. ROCKEFELLER (for himself, Mr. DAYTON, and Mr. WELLSTONE) introduced the following bill; which was read twice and referred to the Committee on Finance

To provide certain safeguards with respect to the domestic steel industry.

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 `Save the American Steel Industry Act of 2001'.

SEC. 2. TABLE OF CONTENTS.

The table of contents of this Act is as follows:

Sec. 1. Short title.

Sec. 2. Table of contents.

TITLE I--LEGACY COST SHARING

Sec. 101. Steelworker Retiree Health Care Board.

Sec. 102. Steelworker Retiree Health Care Trust Fund.

Sec. 103. Health Care Benefit Costs Assistance Program.

Sec. 104. Excise tax on steel.

TITLE II--INCENTIVES FOR CONSOLIDATION

Sec. 201. Grant program for merged companies.

TITLE I--LEGACY COST SHARING

SEC. 101. STEELWORKER RETIREE HEALTH CARE BOARD.

(a) ESTABLISHMENT- There is established in the Department of Labor a Steelworker Retiree Health Care Board.

(b) COMPOSITION- The Board shall be composed of 5 members appointed by the Secretary of Labor, of whom--

(1) one shall be designated by the Secretary as Chairman;

(2) one shall be appointed after taking into consideration the recommendations made by the Speaker of the House of Representatives and the majority leader of the Senate;

(3) one shall be appointed after taking into consideration the recommendations made by the minority leader of the House of Representatives and the minority leader of the Senate;

(4) one shall represent the interests of steel and iron ore workers; and

(5) one shall represent the interests of the steel and iron ore industry.

(c) MEMBERSHIP REQUIREMENTS- Members of the Board shall have substantial experience, training, and expertise in matters relating to retiree health benefits.

(d) LENGTH OF APPOINTMENTS-

(1) TERMS- A member of the Board shall be appointed for a term of 2 years.

(2) VACANCIES-

(A) IN GENERAL- A vacancy on the Board shall be filled in the manner in which the original appointment was made and shall be subject to any conditions that applied with respect to the original appointment.

(B) COMPLETION OF TERM- An individual chosen to fill a vacancy shall be appointed for the unexpired term of the member replaced.

(3) EXPIRATION- The term of any member shall not expire before the date on which the member's successor takes office.

(e) DUTIES- The Board shall--

(1) administer the Health Care Benefit Costs Assistance Program established under section 103;

(2) establish policies for the investment and management of the Steelworker Retiree Health Care Trust Fund established under section 102 that shall provide for prudent investments and low administrative costs; and

(3) review and approve the budget of the Board.

(f) ADMINISTRATIVE PROVISIONS-

(1) IN GENERAL- The Board may--

(A) adopt, alter, and use a seal; and

(B) take such other actions as may be necessary to carry out the functions of the Board.

(2) MEETINGS- The Board shall meet--

(A) at least semiannually; and

(B) at additional times at the call of the Chairman.

(3) EXERCISE OF POWERS-

(A) IN GENERAL- The Board shall perform the functions and exercise the powers of the Board on a majority vote of a quorum of the Board. Three members of the Board shall constitute a quorum for the transaction of business.

(B) VACANCIES- A vacancy on the Board shall not impair the authority of a quorum of the Board to perform the functions and exercise the powers of the Board.

(g) COMPENSATION-

(1) IN GENERAL- Each member of the Board who is not an officer or employee of the Federal Government shall be compensated at the daily rate of basic pay for level V of the Executive Schedule for each day during which such member is engaged in performing a function of the Board.

(2) EXPENSES- A member of the Board shall be paid travel, per diem, and other necessary expenses under subchapter I of chapter 57 of title 5, United States Code, while traveling away from such member's home or regular place of business in the performance of the duties of the Board.

(3) SOURCE OF FUNDS- Payments authorized under this subsection shall be paid from the Steelworker Retiree Health Care Trust Fund.

SEC. 102. STEELWORKER RETIREE HEALTH CARE 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 `Steelworker Retiree Health Care Trust Fund', consisting of such amounts as may be appropriated or credited to the Steelworker Retiree Health Care Trust Fund as provided in this section.

(b) TRANSFER OF DESIGNATED AMOUNTS TO TRUST FUND- There is hereby appropriated to the Steelworker

Retiree Health Care Trust Fund amounts equivalent to the taxes received in the Treasury under section 4191 of the Internal Revenue Code of 1986 (relating to excise tax on steel).

(c) EXPENDITURES FROM TRUST FUND-

(1) HEALTH CARE BENEFIT COST PAYMENTS- The Secretary of the Treasury shall make payments from the Trust Fund in accordance with section 103.

(2) ADMINISTRATIVE EXPENSES- Amounts in the Trust Fund shall be available to pay the administrative expenses of the Secretary of the Treasury directly attributable to carrying out this section and section 103 with respect to such Trust Fund.

SEC. 103. HEALTH CARE BENEFIT COSTS ASSISTANCE PROGRAM.

(a) ESTABLISHMENT OF PROGRAM- The Steelworker Retiree Health Care Board shall establish by regulation a Health Care Benefit Costs Assistance Program under which the Board shall provide for payments under this section from the balance in the Steelworker Retiree Health Care Trust Fund to designated steelworker group health plans to assist in the funding of qualified retiree health benefits under such plans.

(b) DEFINITIONS- For purposes of this section--

(1) DESIGNATED STEELWORKER GROUP HEALTH PLAN-

(A) IN GENERAL- The term `designated steelworker group health plan' means a group health plan--

(i) under which participants and beneficiaries include retired steelworker participants or their beneficiaries, and

(ii) that is in effect on the date of the enactment of this Act or meets the requirements of subparagraph (B).

(B) PLANS MAINTAINED IN CONNECTION WITH SUBSEQUENT ACQUISITIONS- A group health plan meets the requirements of this subparagraph if--

(i) such plan is in effect as of the date of an affirmative determination under section 201(b)(1) with respect to an acquisition, and

(ii) a person who was engaged in, or resulted from, such acquisition is obligated, under the terms of the plan as in effect immediately after such determination, to make contributions to the plan.

(C) SUCCESSOR PLANS- Any group health plan described in clause (i) of subparagraph (A) that is a successor to a terminated designated steelworker group health plan (as defined in subparagraph (A)) shall be treated as such designated steelworker group health plan to the extent that it provides benefits to individuals who were eligible steelworker participants or their beneficiaries under the terminated plan, if--

(i) such benefits are at least equivalent to the benefits provided by the terminated plan immediately before its termination, or

(ii) in any case in which the benefits under the plan do not meet the requirements of clause (i), any deviation from such requirements was adopted by agreement with an authorized representative of the individuals who were eligible steelworker participants or their beneficiaries under the terminated plan.

(2) QUALIFIED RETIREE HEALTH BENEFIT- The term `qualified retiree health benefit' means medical care which is provided under a designated steelworker group health plan--

(A) to an eligible steelworker participant who retired under such plan prior to the date of the enactment of this Act (or to an eligible beneficiary of such a participant), or

(B) in the case of a plan described in paragraph (1)(B), to an eligible steelworker participant who retires under such plan during the 180-day period beginning with the applicable effective date (or to an eligible beneficiary of such a participant).

(3) STEELWORKER PARTICIPANT-

(A) IN GENERAL- The term `steelworker participant' means a participant who was, while employed as a participant in the plan, actively engaged in the production of any steel product specified in subparagraph (B).

(B) APPLICABILITY- The categories of steel products specified in this subparagraph are as follows: semifinished steel, stainless steel, plates, sheets and strips, rods, wire and wire products, rail type products, bars, structural shapes and units, pipes and tubes, iron ore, pig iron, and coke and coke products.

(4) APPLICABLE EFFECTIVE DATE- The term `applicable effective date' means the date of the enactment of this Act, except that, in the case of a plan meeting the requirements of paragraph (1)(B), such term means the date of the affirmative decision of the Secretary of Commerce referred to in paragraph (1)(B).

(5) ELIGIBILITY- A steelworker participant under a designated steelworker group health plan (or such participant's beneficiary) for any plan year is `eligible' for such plan year if such participant or beneficiary was a participant or beneficiary under such plan as of the applicable effective date and has remained a participant or beneficiary under such plan without an intervening break in coverage. For purposes of this paragraph, a suspension of benefits by reason of a case under chapter 11 of title 11, United States Code, or under any similar Federal law or law of a State or political subdivision of a State shall not be treated as a break in coverage.

(6) OTHER DEFINITIONS- Terms used in this section which are defined in sections 3 and 733(a) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002 and 1191b(a)) shall have the meanings provided such terms in such sections.

(c) APPLICATIONS- During the 180-day period following the applicable effective date, a plan sponsor of a

designated steelworker group health plan providing qualified retiree health care benefits may apply to the Board for contributions to the plan under the Health Care Benefit Costs Assistance Program as reimbursement for benefit costs as provided under this section. Such applications shall be accepted by the Board only if they are filed in such form and manner as shall be prescribed in regulations of the Board.

(d) PAYMENT OF CONTRIBUTIONS-

(1) IN GENERAL- Upon receipt of an application with respect to a designated steelworker group health plan filed with the Board in accordance with subsection (c), the Board shall pay contributions to the plan from the Trust Fund for each calendar year beginning after the 180-day period described in subsection (c). Such contributions shall be allocated to plan years which do not coincide with calendar years as provided in regulations of the Board.

(2) AMOUNT OF CONTRIBUTIONS-

(A) IN GENERAL- Subject to subparagraph (F), total contributions paid to a plan under this section for any calendar year shall be equal to 75 percent of the qualified expenditures of the plan made during such calendar year.

(B) QUALIFIED EXPENDITURES- For purposes of subparagraph (A), the term `qualified expenditures' of a plan for any calendar year means the costs of items and services constituting qualified retiree health benefits paid by the plan during such calendar year, employing the cost levels for such items and services that prevailed as of the applicable effective date.

(C) ACCOUNTING FOR QUALIFIED EXPENDITURES- The Board shall provide by regulation for the payment of contributions under this section for any calendar year in periodic installments, determined on the basis of information currently received by the Board with respect to the qualified expenditures of the plan and such estimates as the Board considers appropriate. Adjustments shall be made in the amount of such installments to the extent necessary to compensate for payments of prior installments that were less than or greater than the correct amount.

(D) EFFECT OF SUBSEQUENT PLAN AMENDMENTS DISREGARDED-

(i) IN GENERAL- Subject to clause (ii), for purposes of determining qualified expenditures under this paragraph, any amendment to the plan taking effect after the applicable effective date shall be disregarded to the extent that it increases benefit costs or adds new benefits.

(ii) REDUCTIONS AND RESTORATIONS- Amendments to the plan taking effect after the applicable effective date shall be taken into account to the extent that such amendments--

(I) reduce benefit costs or eliminate existing benefits, or

(II) increase benefit costs or add new benefits with the effect of restoring levels of benefit costs to levels in effect prior to any reduction described in subclause (I), or restoring benefits that were eliminated as described in subclause (I).

(E) INCREASES IN CONSUMER PRICE INDEX TAKEN INTO ACCOUNT- For purposes of determining qualified expenditures under this paragraph, increases since the applicable effective date in the costs of items and services constituting qualified retiree health benefits under a plan shall be allowed under this section to the extent that such increases do not exceed the annual rate of increase in the consumer price index for all urban consumers (U. S. city average) issued by the Bureau of Labor Statistics.

(F) ADJUSTMENT TO CONTRIBUTIONS IN THE EVENT OF TRUST FUND INSUFFICIENCY- If the Board determines during any calendar year that, as of any date during the following calendar year, the balance in the Trust Fund will be insufficient to meet all contributions otherwise required under this section to be made from the Trust Fund for such following calendar year--

(i) the Board shall immediately publish such determination in the Federal Register, and

(ii) the Board shall distribute the balance in the Trust Fund available for contributions payable during such following calendar year among all plans required to receive contributions for such following calendar year in direct proportion to the number of eligible participants and eligible

beneficiaries under the plans as of the beginning of such following calendar year.

Such distribution to the plans shall be deemed payment in full of contributions required to be made to such plans under this section for such calendar year. Determinations under this section with respect to any calendar year shall be made irrespective of any distribution from the Trust Fund made pursuant to this subparagraph for the prior calendar year.

(e) REDUCTION OF REQUIRED CONTRIBUTIONS- If the Board determines during any calendar year that, as of any date during the following calendar year, the balance in the Trust Fund will be in excess of the amount necessary to meet all contributions required under this section to be made from the Trust Fund for such following calendar year--

(1) the Board shall immediately publish such determination in the Federal Register, and

(2) the Board shall certify to the Secretary of the Treasury the amount of such excess.

SEC. 104. EXCISE TAX ON STEEL.

(a) IN GENERAL- Chapter 32 of the Internal Revenue Code of 1986 (relating to manufacturers excise taxes) is amended by inserting after subchapter D the following new subchapter:

`Subchapter E--Steel

`Sec. 4191. Imposition of Tax.

`SEC. 4191. IMPOSITION OF TAX.

`(a) IMPOSITION OF TAX- There is hereby imposed a tax on steel sold by the manufacturer, producer, or importer thereof.

`(b) DETERMINATION OF TAX-

`(1) IN GENERAL- The amount of tax imposed by subsection (a) shall be the applicable percentage of the price at which the steel is sold.

`(2) APPLICABLE PERCENTAGE- For purposes of paragraph (1), the applicable percentage for any taxable year shall be 2 percent reduced (but not below zero) by the excess contribution percentage.

`(3) EXCESS CONTRIBUTION PERCENTAGE- For purposes of paragraph (2), the excess contribution percentage for a calendar year is the number of percentage points which the Secretary determines will, as of the last day of such calendar year, reduce to zero the excess (if any) of the amount necessary to meet all contributions required under section 103 of the Save the American Steel Industry Act of 2001 to be made from the Steelworker Retiree Health Care Trust Fund for such calendar year. The Secretary shall make such determination on the basis of the certification made by the Steelworker Retiree Health Care Board under section 103(e) of such Act.

`(c) LIABILITY FOR TAX- The tax imposed by subsection (a) shall be paid by the manufacturer, producer, or importer.

`(d) DEFINITIONS AND SPECIAL RULES- For purposes of this subchapter--

`(1) STEEL- The term `steel' means steel in any of the following categories of steel products: semifinished steel, stainless steel, plates, sheets and strips, rods, wire and wire products, rail type products, bars, structural shapes and units, pipes and tubes, iron ore, pig iron, and coke and coke products.

`(2) IMPORTER- The term `importer' means the person entering the steel for consumption or use.

`(3) UNITED STATES- The term `United States' includes any foreign trade zone of the United States.'.

(b) EXEMPTIONS, ETC., NOT TO APPLY-

(1) Subsection (a) of section 4218 of such Code is amended by inserting `and steel taxable under section 4191,' after `4121,'.

(2) Subsection (a) of section 4221 of such Code is amended by inserting `4191,' after `4121,'.

(3) The third sentence of section 6416(b)(2) of such Code is amended by striking `or 4121' and inserting `, 4121, and 4191'.

(c) CLERICAL AMENDMENT- The table of subchapters for chapter 32 of such Code is amended by inserting after the item relating to subchapter D the following new item:

`Subchapter E. Steel.'.

(d) EFFECTIVE DATE- The amendments made by this section shall apply to sales occurring after 180 days after the date of the enactment of this Act.

TITLE II--INCENTIVES FOR CONSOLIDATION

SEC. 201. GRANT PROGRAM FOR MERGED COMPANIES.

(a) ELIGIBLE PERSONS- Any person who acquires another person that produces any of the steel products specified in section 103(b)(3)(B) may, during the 1-year period beginning on the effective date of the acquisition, apply to the Secretary of Commerce for a grant under this section to defray the costs necessary--

(1) to bring the entity resulting from the acquisition into compliance with requirements imposed by laws to protect the environment; and

(2) to maintain such compliance.

(b) DETERMINATIONS BY THE SECRETARY OF COMMERCE-

(1) EMPLOYMENT AND PRODUCTION RETENTION- Upon receipt of an application under subsection (a), the Secretary of Commerce shall determine whether or not the acquisition set out in the application will promote the retention of jobs and production capacity in the sector producing steel products specified in section 103(b)(3)(B). The Secretary may make an affirmative determination under the preceding sentence only if the Secretary determines that after the acquisition--

(A) the maximum number of workers of the acquiring person and the person acquired that are engaged in the production of steel products specified in section 103(b)(3)(B) on the day before the effective date of the acquisition will be retained, consistent with the long-term viability of the combined entity, except that such maximum number--

(i) must be at least 80 percent of the total number of such workers; and

(ii) must include at least 50 percent of the number of such workers of the acquired person; and

(B) at least 80 percent of the facilities of the acquiring person and the person acquired that are used for the production of those steel products on the day before the acquisition is completed will be retained.

(2) ENVIRONMENTAL COSTS- If the Secretary of Commerce makes an affirmative determination under paragraph (1), the Secretary shall provide a grant to the applicant in an amount determined by the Secretary to cover the costs incurred or to be incurred by the applicant--

(A) in complying with the requirements imposed by laws to protect the environment; and

(B) in maintaining such compliance.

(c) AUTHORIZATION; AMOUNT OF GRANTS-

(1) AUTHORIZATION- There is authorized to be appropriated to carry out this section $500,000,000.

(2) AMOUNT OF GRANTS- Not more than $200,000,000 may be provided to any applicant under this section.

(d) PENALTIES-

(1) FAILURE TO ACHIEVE RETENTION LEVELS IN FIRST 5 YEARS- In any case in which a person receives a grant under this section and, at any time during the 5-year period after the grant is awarded, the number of workers, or the production capacity, described in paragraph (1) of subsection (b) with respect to that applicant falls below the 80 percent level described in subparagraph (A)(i) or (B) of that paragraph, the applicant shall forfeit to the Secretary the dollar amount of the grant, plus 20 percent of that amount.

(2) FAILURE TO ACHIEVE RETENTION LEVELS AFTER FIRST 5 YEARS- In any case in which a person receives a grant under this section and the number of workers, or the production capacity, described in paragraph (1) of subsection (b) with respect to that applicant falls below the 80 percent level described in subparagraph (A)(i) or (B) of that paragraph--

(A) during the 6th year after the grant is awarded, the applicant shall forfeit to the Secretary 50 percent of the dollar amount of the grant, plus 20 percent of that forfeited amount;

(B) during the 7th year after the grant is awarded, the applicant shall forfeit to the Secretary 40 percent of the dollar amount of the grant, plus 20 percent of that forfeited amount;

(C) during the 8th year after the grant is awarded, the applicant shall forfeit to the Secretary 30 percent of the dollar amount of the grant, plus 20 percent of that forfeited amount;

(D) during the 9th year after the grant is awarded, the applicant shall forfeit to the Secretary 20 percent of the dollar amount of the grant, plus 20 percent of that forfeited amount; and

(E) during the 10th year after the grant is awarded, the applicant shall forfeit to the Secretary 10 percent of the dollar amount of the grant, plus 20 percent of that forfeited amount.

(3) COURT ACTION- In the event of the failure of a person to forfeit any amount under paragraph (1) or (2), the Secretary of Commerce may bring an action in the appropriate district court against that person to collect that amount.

END