CERTAIN RELATED PERSONS AND SUCCESSORS IN INTEREST RELIEVED OF LIABILITY IF PREMIUMS PREPAID.

SEC. 211. CERTAIN RELATED PERSONS AND SUCCESSORS IN INTEREST RELIEVED OF LIABILITY IF PREMIUMS PREPAID.(a) Combined Benefit Fund.—Section 9704 of the Internal Revenue Code of 1986 (relating to liability of assigned operators) is amended by adding at the end the following new subsection:“(j) Prepayment of Premium Liability.—“(1) In general.—If—“(A) a payment meeting the requirements of paragraph (3) is made to the Combined Fund by or on behalf of—“(i) any assigned operator to which this subsection applies, or“(ii) any related person to any assigned operator described in clause (i), and“(B) the common parent of the controlled group of corporations described in paragraph (2)(B) is jointly and severally liable for any premium under this section which (but for this subsection) would be required to be paid by the assigned operator or related person,120 STAT. 3021then such common parent (and no other person) shall be liable for such premium.“(2) Assigned operators to which subsection applies.—“(A) In general.—This subsection shall apply to any assigned operator if—“(i) the assigned operator (or a related person to the assigned operator)—“(I) made contributions to the 1950 UMWA Benefit Plan and the 1974 UMWA Benefit Plan for employment during the period covered by the 1988 agreement; and“(II) is not a 1988 agreement operator,“(ii) the assigned operator (and all related persons to the assigned operator) are not actively engaged in the production of coal as of July 1, 2005, and“(iii) the assigned operator was, as of July 20, 1992, a member of a controlled group of corporations described in subparagraph (B).“(B) Controlled group of corporations.—A controlled group of corporations is described in this subparagraph if the common parent of such group is a corporation the shares of which are publicly traded on a United States exchange.“(C) Coordination with repeal of assignments.—A person shall not fail to be treated as an assigned operator to which this subsection applies solely because the person ceases to be an assigned operator by reason of section 9706(h)(1) if the person otherwise meets the requirements of this subsection and is liable for the payment of premiums under section 9706(h)(3).“(D) Controlled group.—For purposes of this subsection, the term ‘controlled group of corporations’ has the meaning given such term by section 52(a).“(3) Requirements.—A payment meets the requirements of this paragraph if—“(A) the amount of the payment is not less than the present value of the total premium liability under this chapter with respect to the Combined Fund of the assigned operators or related persons described in paragraph (1) or their assignees, as determined by the operator’s or related person’s enrolled actuary (as defined in section 7701(a)(35)) using actuarial methods and assumptions each of which is reasonable and which are reasonable in the aggregate, as determined by such enrolled actuary;“(B) such enrolled actuary files with the Secretary of Labor a signed actuarial report containing—“(i) the date of the actuarial valuation applicable to the report; and“(ii) a statement by the enrolled actuary signing the report that, to the best of the actuary’s knowledge, the report is complete and accurate and that in the actuary’s opinion the actuarial assumptions used are in the aggregate reasonably related to the experience of the operator and to reasonable expectations; and“(C) 90 calendar days have elapsed after the report required by subparagraph (B) is filed with the Secretary of Labor, and the Secretary of Labor has not notified the 120 STAT. 3022 assigned operator in writing that the requirements of this paragraph have not been satisfied.“(4) Use of prepayment.—The Combined Fund shall—“(A) establish and maintain an account for each assigned operator or related person by, or on whose behalf, a payment described in paragraph (3) was made,“(B) credit such account with such payment (and any earnings thereon), and“(C) use all amounts in such account exclusively to pay premiums that would (but for this subsection) be required to be paid by the assigned operator.Upon termination of the obligations for the premium liability of any assigned operator or related person for which such account is maintained, all funds remaining in such account (and earnings thereon) shall be refunded to such person as may be designated by the common parent described in paragraph (1)(B).”.(b) Individual Employer Plans.—Section 9711(c) of the Internal Revenue Code of 1986 (relating to joint and several liability) is amended to read as follows:“(c) Joint and Several Liability of Related Persons.—“(1) In general.—Except as provided in paragraph (2), each related person of a last signatory operator to which subsection (a) or (b) applies shall be jointly and severally liable with the last signatory operator for the provision of health care coverage described in subsection (a) or (b).“(2) Liability limited if security provided.—If—“(A) security meeting the requirements of paragraph (3) is provided by or on behalf of—“(i) any last signatory operator which is an assigned operator described in section 9704(j)(2), or“(ii) any related person to any last signatory operator described in clause (i), and“(B) the common parent of the controlled group of corporations described in section 9704(j)(2)(B) is jointly and severally liable for the provision of health care under this section which, but for this paragraph, would be required to be provided by the last signatory operator or related person,then, as of the date the security is provided, such common parent (and no other person) shall be liable for the provision of health care under this section which the last signatory operator or related person would otherwise be required to provide. Security may be provided under this paragraph without regard to whether a payment was made under section 9704(j).“(3) Security.—Security meets the requirements of this paragraph if—“(A) the security—“(i) is in the form of a bond, letter of credit, or cash escrow,“(ii) is provided to the trustees of the 1992 UMWA Benefit Plan solely for the purpose of paying premiums for beneficiaries who would be described in section 9712(b)(2)(B) if the requirements of this section were not met by the last signatory operator, and120 STAT. 3023“(iii) is in an amount equal to 1 year of liability of the last signatory operator under this section, determined by using the average cost of such operator’s liability during the prior 3 calendar years;“(B) the security is in addition to any other security required under any other provision of this title; and“(C) the security remains in place for 5 years.“(4) Refunds of security.—The remaining amount of any security provided under this subsection (and earnings thereon) shall be refunded to the last signatory operator as of the earlier of—“(A) the termination of the obligations of the last signatory operator under this section, or“(B) the end of the 5-year period described in paragraph (4)(C).”.(c) 1992 UMWA Benefit Plan.—Section 9712(d)(4) of the Internal Revenue Code of 1986 (relating to joint and several liability) is amended by adding at the end the following new sentence: “The provisions of section 9711(c)(2) shall apply to any last signatory operator described in such section (without regard to whether security is provided under such section, a payment is made under section 9704(j), or both) and if security meeting the requirements of section 9711(c)(3) is provided, the common parent described in section 9711(c)(2)(B) shall be exclusively responsible for any liability for premiums under this section which, but for this sentence, would be required to be paid by the last signatory operator or any related person.”.(d) Successor in Interest.—Section 9701(c) of the Internal Revenue Code of 1986 (relating to terms relating to operators) is amended by adding at the end the following new paragraph:“(8) Successor in interest.—“(A) Safe harbor.—The term ‘successor in interest’ shall not include any person who—“(i) is an unrelated person to an eligible seller described in subparagraph (C); and“(ii) purchases for fair market value assets, or all of the stock, of a related person to such seller, in a bona fide, arm’s-length sale.“(B) Unrelated person.—The term ‘unrelated person’ means a purchaser who does not bear a relationship to the eligible seller described in section 267(b).“(C) Eligible seller.—For purposes of this paragraph, the term ‘eligible seller’ means an assigned operator described in section 9704(j)(2) or a related person to such assigned operator.”.(e) Effective Date.—The amendments made by this section shall take effect on the date of the enactment of this Act, except that the amendment made by subsection (d) shall apply to transactions after the date of the enactment of this Act.