ACLC NEWS: Advocates Applaud Introduction of Rep. Scott & Adams’ 10-Year Extension of Excise Tax for Black Lung Disability Trust Fund

Legislation Introduced Following Call to Action by 68 Organizations Would Provide Long-Term Certainty for Miners & Families

APPALACHIA – Today, Rep. Bobby Scott (VA-03) and Rep. Alma Adams (NC-12) introduced the Black Lung Benefits Disability Trust Fund Solvency Act of 2022 to extend the Black Lung Excise Tax for 10 years, with original cosponsors  Rep. John Yarmuth (KY-3) and Rep. Matt Cartwright (PA-12). This is a welcome development for miners with black lung disease and their families who rely on the Black Lung Disability Trust Fund for a small monthly living stipend and health insurance. On Jan. 1, 2022, the excise tax rate was cut by more than half after Congress failed to pass a four-year extension in the Build Back Better Act, and the trust fund is now losing approximately $2.8 million every week.

“I’m from Eastern Kentucky and I watched my husband worry about whether he would get his black lung benefits and then whether he would get to keep them. As the Secretary of the Black Lung Association of Southeastern Kentucky I watch every one of the miners in our group worry about whether they can rely on this stipend for the next year to help feed their family or not and if times will get hard for them,” said Patty Amburgey, Secretary, Black Lung Association of Southeastern Kentucky. “As a miner’s widow we would appreciate a ten-year extension and not let this be a worry to our miners and their families. A miner with black lung already has a hard time breathing and this would take away one worry for them.” 

The excise tax is the only source of revenue for the Black Lung Disability Trust Fund (BLDTF), a fund that is already over $4 billion in debt. The BLDTF pays for medical benefits and provides a small monthly living stipend to coal miners who are disabled by black lung disease and their surviving dependents in cases where the miners’ employer has gone bankrupt or not been found responsible. 

Funding for the BLDTF has been clouded by uncertainty for years. In 2018, the excise tax was reduced and collected at 50% of its historic rate for the entirety of 2019, pushing the BLDTF deeper into debt. In 2019 and 2020, the higher, historic rate of the excise tax was reinstated through one-year tax extender bills, but the rate was cut in half again at the end of last year because Congress failed to act. This new bill reinstates the Black Lung Excise tax at its prior, precedented rate and extends the tax for 10 years. A 10-year extension provides longer-term security for the fund and the miners who depend on it compared to short-term, one year extensions. 

“We are grateful that Representative Scott and Representative Adams are listening and introducing this important bill that will provide long-term certainty for miners and their families,” said Rebecca Shelton, Director of Policy and Organizing for Appalachian Citizens’ Law Center. “and as Congress continues to rethink the Build Back Better Act back, they should include this ten-year extension.”

“It’s good to see movement in Congress on finally securing long-term funding for the trust fund,” said Chelsea Barnes, Legislative Director for Appalachian Voices. “The year-to-year instability of this fund has created undue and unnecessary stress for coal miners and their families, while letting coal companies off the hook for these costs that have been unfairly foisted onto taxpayers.”

Last week, the National Black Lung Association and 67 other organizations sent a letter to congressional leadership urging immediate action to pass a 10-year extension of the Black Lung Excise Tax. Last year, Sen. Joe Manchin (WV) introduced the Black Lung Benefits Disability Trust Fund Act of 2021 to extend the Black Lung Excise Tax for 10 years, but that did not advance before the January 1 deadline. A four-year extension of the black lung excise tax is included in the latest version of the Build Back Better Act, but that legislation also has not yet been passed into law.

The 10 year extension is the first step towards addressing the insolvency of the fund, as outlined in a May 2018 Government Accountability Office report, and comes at a crucial time as coal companies continue to pass on their black lung liability to the trust fund when they go through bankruptcy, as discussed in a second GAO report from February of 2020. The May 2018 report indicated that the fund would not have sufficient revenue to cover beneficiary payments and administrative costs beginning in fiscal year 2020. In addition, the February 2020 report found $865 million in black lung liability was pushed from bankrupt “self-insured” coal companies to the Black Lung Disability Trust Fund just between 2014 and 2016, increasing costs while revenues were threatened.  

Background:

Coal miners who are disabled from black lung, as well their surviving dependents, are entitled by law to modest living and medical benefits. The Black Lung Disability Trust Fund pays for these benefits in cases where the miners’ employer has gone bankrupt or where no coal company can be identified as responsible for the miner’s disease. 

The trust fund is more important now than ever because a wave of bankruptcies in the coal industry has created increased pressure on the program. It is supported by a small excise tax paid by companies per ton of coal sold domestically, at a rate that was unchanged for more than three decades: $0.55/ ton of surface mined coal, and $1.10/ ton of coal mined underground. 

In 2018, the excise tax was reduced and collected at less than 50% of its historic rate for the entirety of 2019, pushing the BLDTF deeper into debt. In 2019 and 2020, the higher, historic rate of the excise tax was reinstated through one-year tax extender bills, but the rate was cut in half again at the end of last year because Congress failed to act. The Black Lung Disability Trust Fund Act would extend the Black Lung Excise Tax on coal sales at the current tax rates for 10 years. Meanwhile, the Build Back Better Bill that recently passed through the House of Representatives includes a 4-year extension to the tax. A 10-year extension provides longer-term security for the fund, and for the miners who depend on it compared to short-term, one-year extensions.