PRINTER'S NO. 2644
No. 1950 Session of 2003
INTRODUCED BY VEON, YEWCIC, WOJNAROSKI, BELARDI, FABRIZIO,
READSHAW, GEORGE, HALUSKA, DeWEESE, KENNEY, JOSEPHS,
LEVDANSKY, LEACH, GOODMAN, BIANCUCCI, GRUCELA, WALKO, DALEY,
SURRA, CAPPELLI, YUDICHAK, DeLUCA, SOLOBAY, SAINATO, SANTONI,
YOUNGBLOOD, BEBKO-JONES, SHANER, PISTELLA, BELFANTI, HORSEY,
GERGELY, LAUGHLIN, SCHRODER, MELIO AND KELLER,
SEPTEMBER 29, 2003
REFERRED TO COMMITTEE ON INSURANCE, SEPTEMBER 29, 2003
AN ACT
1 Amending the act of June 26, 2001 (P.L.755, No.77), entitled "An
2 act establishing a special fund and account for money
3 received by the Commonwealth from the Master Settlement
4 Agreement with tobacco manufacturers; providing for home and
5 community-based care, for tobacco use prevention and
6 cessation efforts, for Commonwealth universal research
7 enhancement, for hospital uncompensated care, for health
8 investment insurance, for medical assistance for workers with
9 disabilities, for regional biotechnology research centers,
10 for the HealthLink Program, for community-based health care
11 assistance programs, for PACE reinstatement and PACENET
12 expansion, for medical education loan assistance and for
13 percentage allocation and appropriation of moneys," providing
14 for health care assistance for certain retirees; establishing
15 the Securing Health Care Assistance For Retired Employees
16 Board and the Securing Health Care Assistance Retired
17 Employees Trust Fund; providing for issuance of bonds; and
18 making an appropriation.
19 The General Assembly of the Commonwealth of Pennsylvania
20 hereby enacts as follows:
21 Section 1. The act of June 26, 2001 (P.L.755, No.77), known
22 as the Tobacco Settlement Act, is amended by adding a chapter to
23 read:
1 CHAPTER 29
2 SECURING HEALTH CARE ASSISTANCE FOR RETIRED EMPLOYEES
3 SUBCHAPTER A
4 GENERAL PROVISIONS
5 Section 2901. Short title.
6 This chapter shall be known and may be cited as the Securing
7 Health Care Assistance For Retired Employees Exemption Act
8 (SHARE).
9 Section 2902. Declaration of policy.
10 The General Assembly finds and declares as follows:
11 (1) That there exists a crisis in the steel industry
12 caused by the collapse of the Russian and Asian domestic
13 steel markets and the subsequent dumping of their steel in
14 the United States, much of it in violation of Federal trade
15 laws. The results are significant and are a link to the
16 potential loss of our entire steel industry.
17 (2) Since January 1998, a total of 46,700 steelworker
18 jobs have been lost.
19 (3) Thirty-one companies have filed for bankruptcy,
20 representing 29% of the country's steelmaking capacity.
21 (4) Companies posted operating losses of $1.3 billion
22 during the first nine months of 2001.
23 (5) Steel prices have fallen to unprecedented levels.
24 (6) Approximately 600,000 retirees and dependents rely
25 on the domestic steel industry for health care benefits.
26 (7) Pennsylvania steelworkers helped to build this
27 country's economy, and the production of steel added greatly
28 to our national defense and forged a strong sense of security
29 in this Commonwealth.
30 (8) It has been announced that the Voluntary Employees
20030H1950B2644 - 2 -
1 Beneficiary Association that paid part of retirees' health
2 care and insurance will not ensure claims past March 31,
3 2002. This announcement makes the need for decisive action at
4 the State level more urgent. Pennsylvania has a clear and
5 compelling interest to aid this population of retirees.
6 Section 2903. Definitions.
7 The following words and phrases when used in this chapter
8 shall have the meanings given to them in this section unless the
9 context clearly indicates otherwise:
10 "Board." The Securing Health Care Assistance For Retired
11 Employees Board established under section 2911.
12 "Contractor." The term as it is defined under section 2303
13 of the act of May 17, 1921 (P.L.682, No.284), known as The
14 Insurance Company Law of 1921.
15 "Department." The Department of Labor and Industry of the
16 Commonwealth.
17 "Eligible retirees." Any resident of this Commonwealth who
18 is a retiree of a company whose company paid health care
19 benefits which were established by contract or by a collective
20 bargaining agreement and which have expired due to the
21 bankruptcy of the company. The term shall also include the
22 surviving spouse or dependents of any eligible retiree.
23 "Fund." The Securing Health Care Assistance For Retired
24 Employees Trust Fund established under section 2921.
25 "Medicare." The Federal program established under Title
26 XVIII of the Social Security Act (49 Stat. 620, 42 U.S.C. § 1395
27 et seq.).
28 "PACE." The Pharmaceutical Assistance Contract for the
29 Elderly program provided for under Chapter 5 of the act of
30 August 26, 1971 (P.L.351, No.91), known as the State Lottery
20030H1950B2644 - 3 -
1 Law.
2 "PACENET." The Pharmaceutical Assistance Contract for the
3 Elderly Needs Enhancement Tier program provided for in Chapter 5
4 of the act of August 26, 1971 (P.L.351, No.91), known as the
5 State Lottery Law.
6 "Program." The Securing Health Care Assistance For Retired
7 Employees Program established under section 2913.
8 SUBCHAPTER B
9 PROGRAM ADMINISTRATION
10 Section 2911. Securing Health Care Assistance For Retired
11 Employees Board.
12 (a) Establishment.--There is hereby established the Securing
13 Health Care Assistance For Retired Employees Board as a
14 departmental board under the department.
15 (b) Membership.--The board shall consist of the following
16 members:
17 (1) One member appointed by the Majority Leader of the
18 Senate.
19 (2) One member appointed by the Minority Leader of the
20 Senate.
21 (3) One member appointed by the Majority Leader of the
22 House of Representatives.
23 (4) One member appointed by the Minority Leader of the
24 House of Representatives.
25 (5) The Secretary of Labor and Industry or his designee.
26 (6) The Insurance Commissioner or his designee.
27 (7) One member from the International United
28 Steelworkers of America Union appointed by the Governor.
29 (8) One member appointed by the Governor.
30 (9) One member from the Steelworkers Organization of
20030H1950B2644 - 4 -
1 Active Retirees appointed by the Governor.
2 (c) Compensation.--Members of the board shall receive no
3 compensation for their services but shall be reimbursed for
4 their necessary expenses incurred while serving as board
5 members.
6 (d) Vacancies.--A vacancy on the board shall be filled by
7 the appointing authority for the balance of the term.
8 (e) Terms of members.--Members of the board shall serve
9 terms of four years and until a successor is appointed and
10 qualified. Members may serve only two consecutive full terms.
11 Any member of the board may be removed by the department or by a
12 majority of the other board members for malfeasance in office,
13 failure to attend regularly scheduled meetings or any cause that
14 renders the member incapable or unfit to discharge his duties.
15 (f) Meetings.--Meetings of the board shall be subject to 65
16 Pa.C.S. Ch. 7 (relating to open meetings) and the act of June
17 21, 1957 (P.L.390, No.212), referred to as the Right-to-Know
18 Law. A quorum for a meeting shall be a majority of the total
19 membership of the board. Any action of the board requires the
20 affirmative vote of a majority of a quorum.
21 Section 2912. Powers and duties of Securing Health Care
22 Assistance For Retired Employees Board.
23 It should be the duty of the board and the board shall have
24 the power to:
25 (1) Implement a health care benefits program under
26 section 2913.
27 (2) Administer the fund established under section 2921.
28 (3) Determine if the fund established in section 2921
29 has funds sufficient to continue to implement the program to
30 provide group health plans for eligible retirees as defined
20030H1950B2644 - 5 -
1 in section 2903 and to report those findings annually to the
2 Governor and the General Assembly and to make
3 recommendations.
4 Section 2913. Securing Health Care Assistance For Retired
5 Employees Program.
6 (a) Implementation.--The board shall implement the Securing
7 Health Care Assistance For Retired Employees Program to provide
8 group health plans for eligible retirees.
9 (b) Structure.--The board shall model the structure of the
10 program on the structure of the children's health insurance
11 program under Article XXIII of the act of May 17, 1921 (P.L.682,
12 No.284), known as The Insurance Company Law of 1921. The board
13 shall structure the program so that it includes the following
14 provisions:
15 (1) Eligible retirees who are eligible to receive
16 Medicare shall enroll or continue to be enrolled in a
17 Medicare program. The program shall provide for the
18 enrollment of the eligible retirees who are eligible to
19 receive Medicare in a commercially available Medicare
20 supplement plan. Additionally, the program shall provide for
21 the enrollment of eligible retirees who are eligible to
22 receive Medicare in a commercially available prescription
23 drug coverage plan to provide for prescription drugs not
24 covered under PACE or PACENET. The board shall set the amount
25 of monthly premiums to be paid by eligible retirees who are
26 eligible to receive Medicare and the amount of copayment
27 required for prescription drugs.
28 (2) Eligible retirees who are not eligible for Medicare
29 or who are not eligible for health care insurance assistance
30 through the Federal tax credit trade adjustment assistance
20030H1950B2644 - 6 -
1 program shall be provided enrollment in a commercially
2 available health care plan that offers a comprehensive
3 benefit package and a commercially available prescription
4 drug coverage plan with coverages and benefits similar to
5 those they had or did receive from their prior employer. The
6 board shall set the amount of monthly premiums to be paid by
7 eligible retirees who are not eligible for Medicare and the
8 amount of copayment required for prescription drugs. Any
9 eligible retiree under this paragraph who subsequently
10 becomes eligible for Medicare shall be required to meet the
11 requirements of paragraph (1) and any other requirements set
12 by the board.
13 (3) The board shall make every effort to ensure that
14 administration costs are kept at a minimum. The board shall
15 require contractors to follow the provisions of section
16 2311(b)(2) of The Insurance Company Law of 1921.
17 (4) The board shall make every effort to ensure that as
18 many types of the various entities listed under the
19 definition of contractor participate in the program.
20 (c) Comparable program.--If the Federal Government enacts a
21 program providing benefits comparable to those contained in this
22 chapter as determined by the board, then the program established
23 under this chapter shall be discontinued.
24 (d) Modification of program.--If the Federal Government
25 enacts a program which the board determines not to be comparable
26 to the program established under this chapter, the board shall
27 have the power to provide additional group health plan coverage
28 and benefits which supplement the Federal program.
29 SUBCHAPTER C
30 TRUST FUND
20030H1950B2644 - 7 -
1 Section 2921. Securing Health Care Assistance For Retired
2 Employees Trust Fund.
3 (a) Establishment.--There is hereby established a separate
4 account in the State Treasury to be known as the Securing Health
5 Care Assistance For Retired Employees Trust Fund. The fund shall
6 be administered by the board. All interest earned from the
7 investment or deposit of moneys accumulated in the fund shall be
8 deposited in the fund for the same use.
9 (b) Funds.--All moneys deposited into the fund shall be held
10 in trust and shall not be considered general revenue of the
11 Commonwealth but shall be used only to effectuate the purposes
12 of this act as determined by the board.
13 (c) Source of fund.--The proceeds realized from the sale of
14 bonds under this chapter shall be paid into the fund and are
15 hereby specifically dedicated to the purpose of this chapter.
16 The moneys shall be paid periodically by the State Treasurer to
17 the board at times and in amounts as may be necessary to satisfy
18 the purpose of this chapter.
19 Section 2922. Authority to borrow.
20 The issuing officials are hereby authorized and directed to
21 borrow, on the credit of the Commonwealth, a sum of money not
22 exceeding in the aggregate the sum of $225,000,000 as may be
23 necessary to carry out the purposes of this chapter.
24 Section 2923. Bonds, issue, maturity, interest, etc.
25 (a) Issuance.--As evidence of the indebtedness authorized
26 under this chapter, general obligation bonds of the Commonwealth
27 shall be issued for the total amount, in forms, in denominations
28 and subject to terms and conditions of issue, redemption and
29 maturity, rate or rates of interest and time of payment of
30 interest as the issuing officials shall direct, except that the
20030H1950B2644 - 8 -
1 latest stated maturity date shall not exceed 25 years from the
2 date of the bond first issued for each such series.
3 (b) Signatures and seal.--All bonds issued under the
4 authority of this chapter shall bear facsimile signatures of the
5 issuing officials and a facsimile of the Great Seal of the
6 Commonwealth and shall be countersigned by two duly authorized
7 officers of the duly authorized loan and transfer agents of the
8 Commonwealth.
9 (c) Full faith and credit.--All bonds issued in accordance
10 with the provisions of this chapter shall be direct obligations
11 of the Commonwealth, and the full faith and credit of the
12 Commonwealth are hereby pledged for the payment of the interest
13 thereon as the same shall become due and for the payment of the
14 principal thereof at maturity. All bonds issued under the
15 provisions of this chapter shall be exempt from taxation for
16 State and local purposes. The principal of and interest on these
17 bonds shall be payable in lawful money of the United States of
18 America.
19 (d) Form.--Bonds issued under this chapter may be issued as
20 coupon bonds or registered as to both principal and interest as
21 the issuing officials may determine. If interest coupons are
22 attached, they shall contain the facsimile signature of the
23 State Treasurer.
24 (e) Amount.--The issuing officials shall provide for the
25 amortization of the bonds issued under this chapter in
26 substantial and regular amounts over the term of the debt.
27 (f) Preparation.--The issuing officials shall proceed to
28 have the necessary bonds prepared and printed. The bonds, as
29 soon as they are prepared and printed, shall be deposited with
30 the duly authorized loan and transfer agent of the Commonwealth,
20030H1950B2644 - 9 -
1 there to remain until sold in accordance with the provisions of
2 this chapter.
3 Section 2924. Sale of bonds.
4 (a) Offering for sale.--When bonds are issued under this
5 chapter, they shall be offered for sale and shall be sold by the
6 issuing officials to the highest and best bidder or bidders
7 after due public advertisement, on such terms and conditions and
8 upon such open competitive bidding as the issuing officials
9 shall direct. The manner and character of advertisement and the
10 times of advertising shall be prescribed by the issuing
11 officials.
12 (b) Private sale.--Any portion of any bond issue offered
13 under subsection (a) and not sold or subscribed for may be
14 disposed of by private sale by the issuing officials, in a
15 manner and at prices as the Governor shall direct.
16 (c) Series.--When bonds are issued from time to time, the
17 bonds of each issue shall constitute a separate series to be
18 designated by the issuing officials or may be combined for sale
19 as one series with other general obligation bonds of the
20 Commonwealth.
21 Section 2925. Refunding bonds.
22 The issuing officials are hereby authorized to provide by
23 resolution for the issuance of refunding bonds for the purpose
24 of refunding any bonds issued under the provisions of this
25 chapter and then outstanding, either by voluntary exchange with
26 the holders of such outstanding bonds with accrued interest and
27 any premium payable thereon, at maturity or at any call date.
28 The issuance of refunding bonds, the maturities and other
29 details thereof, the rights of the holders thereof and the
30 duties of the issuing officials in respect to refunding bonds
20030H1950B2644 - 10 -
1 shall be governed by the provisions of this chapter, insofar as
2 the provisions may be applicable. Refunding bonds may be issued
3 by the issuing officials to refund bonds originally issued or to
4 refund bonds previously issued for refunding purposes.
5 Section 2926. Registration of bonds.
6 The Auditor General shall prepare the necessary registry book
7 to be kept in the office of the duly authorized loan and
8 transfer agent of the Commonwealth for the registration of any
9 bonds, at the request of owners thereof, according to the terms
10 and conditions of issue directed by the issuing officials. All
11 bonds which are issued under this chapter without interest
12 coupons attached shall be registered in the registry books kept
13 by the duly authorized loan and transfer agent of the
14 Commonwealth.
15 Section 2927. Appropriation.
16 The sum of $15,000,000 is hereby appropriated to the Securing
17 Health Care Assistance For Retired Employees Trust Fund for the
18 fiscal year July 1, 2003, to June 30, 2004, from the Health
19 Endowment Account for Long-Term Hope established in section
20 303(b) of this act.
21 SUBCHAPTER M
22 MISCELLANEOUS PROVISIONS
23 Section 2991. Inconsistencies.
24 If there is an inconsistency between a provision of this
25 chapter and another provision of this act, the provision of this
26 chapter shall control.
27 Section 3. This act shall take effect in 60 days.
H18L35JLW/20030H1950B2644 - 11 -