PRINTER'S NO. 1119
No. 953 Session of 2003
INTRODUCED BY VEON, YEWCIC, WOJNAROSKI, HARHAI, BUXTON, DALEY, DERMODY, GEIST, SOLOBAY, MELIO, TANGRETTI, HALUSKA, PETRARCA, WALKO, READSHAW, CAPPELLI, COSTA, THOMAS, CAWLEY, YUDICHAK, CORRIGAN, HORSEY, CURRY, GEORGE, LaGROTTA, PISTELLA, DeLUCA, GOODMAN, EACHUS, LAUGHLIN, SAINATO, BELARDI, ROONEY, MARKOSEK, FRANKEL, YOUNGBLOOD, GRUITZA, GERGELY, PRESTON, BEBKO-JONES, FABRIZIO, JAMES, McGEEHAN, CLYMER, LEACH AND PALLONE, MARCH 21, 2003
REFERRED TO COMMITTEE ON LABOR RELATIONS, MARCH 21, 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 20030H0953B1119 - 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 20030H0953B1119 - 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 20030H0953B1119 - 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 20030H0953B1119 - 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 shall be provided enrollment in a commercially available 30 health care plan that offers a comprehensive benefit package 20030H0953B1119 - 6 -
1 and a commercially available prescription drug coverage plan 2 with coverages and benefits similar to those they had or did 3 receive from their prior employer. The board shall set the 4 amount of monthly premiums to be paid by eligible retirees 5 who are not eligible for Medicare and the amount of copayment 6 required for prescription drugs. Any eligible retiree under 7 this paragraph who subsequently becomes eligible for Medicare 8 shall be required to meet the requirements of paragraph (1) 9 and any other requirements set by the board. 10 (3) The board shall make every effort to ensure that 11 administration costs are kept at a minimum. The board shall 12 require contractors to follow the provisions of section 13 2311(b)(2) of The Insurance Company Law of 1921. 14 (4) The board shall make every effort to ensure that as 15 many types of the various entities listed under the 16 definition of contractor participate in the program. 17 (c) Comparable program.--If the Federal Government enacts a 18 program providing benefits comparable to those contained in this 19 chapter as determined by the board, then the program established 20 under this chapter shall be discontinued. 21 (d) Modification of program.--If the Federal Government 22 enacts a program which the board determines not to be comparable 23 to the program established under this chapter, the board shall 24 have the power to provide additional group health plan coverage 25 and benefits which supplement the Federal program. 26 SUBCHAPTER C 27 TRUST FUND 28 Section 2921. Securing Health Care Assistance For Retired 29 Employees Trust Fund. 30 (a) Establishment.--There is hereby established a separate 20030H0953B1119 - 7 -
1 account in the State Treasury to be known as the Securing Health 2 Care Assistance For Retired Employees Trust Fund. The fund shall 3 be administered by the board. All interest earned from the 4 investment or deposit of moneys accumulated in the fund shall be 5 deposited in the fund for the same use. 6 (b) Funds.--All moneys deposited into the fund shall be held 7 in trust and shall not be considered general revenue of the 8 Commonwealth but shall be used only to effectuate the purposes 9 of this act as determined by the board. 10 (c) Source of fund.--The proceeds realized from the sale of 11 bonds under this chapter shall be paid into the fund and are 12 hereby specifically dedicated to the purpose of this chapter. 13 The moneys shall be paid periodically by the State Treasurer to 14 the board at times and in amounts as may be necessary to satisfy 15 the purpose of this chapter. 16 Section 2922. Authority to borrow. 17 The issuing officials are hereby authorized and directed to 18 borrow, on the credit of the Commonwealth, a sum of money not 19 exceeding in the aggregate the sum of $225,000,000 as may be 20 necessary to carry out the purposes of this chapter. 21 Section 2923. Bonds, issue, maturity, interest, etc. 22 (a) Issuance.--As evidence of the indebtedness authorized 23 under this chapter, general obligation bonds of the Commonwealth 24 shall be issued for the total amount, in forms, in denominations 25 and subject to terms and conditions of issue, redemption and 26 maturity, rate or rates of interest and time of payment of 27 interest as the issuing officials shall direct, except that the 28 latest stated maturity date shall not exceed 25 years from the 29 date of the bond first issued for each such series. 30 (b) Signatures and seal.--All bonds issued under the 20030H0953B1119 - 8 -
1 authority of this chapter shall bear facsimile signatures of the 2 issuing officials and a facsimile of the Great Seal of the 3 Commonwealth and shall be countersigned by two duly authorized 4 officers of the duly authorized loan and transfer agents of the 5 Commonwealth. 6 (c) Full faith and credit.--All bonds issued in accordance 7 with the provisions of this chapter shall be direct obligations 8 of the Commonwealth, and the full faith and credit of the 9 Commonwealth are hereby pledged for the payment of the interest 10 thereon as the same shall become due and for the payment of the 11 principal thereof at maturity. All bonds issued under the 12 provisions of this chapter shall be exempt from taxation for 13 State and local purposes. The principal of and interest on these 14 bonds shall be payable in lawful money of the United States of 15 America. 16 (d) Form.--Bonds issued under this chapter may be issued as 17 coupon bonds or registered as to both principal and interest as 18 the issuing officials may determine. If interest coupons are 19 attached, they shall contain the facsimile signature of the 20 State Treasurer. 21 (e) Amount.--The issuing officials shall provide for the 22 amortization of the bonds issued under this chapter in 23 substantial and regular amounts over the term of the debt. 24 (f) Preparation.--The issuing officials shall proceed to 25 have the necessary bonds prepared and printed. The bonds, as 26 soon as they are prepared and printed, shall be deposited with 27 the duly authorized loan and transfer agent of the Commonwealth, 28 there to remain until sold in accordance with the provisions of 29 this chapter. 30 Section 2924. Sale of bonds. 20030H0953B1119 - 9 -
1 (a) Offering for sale.--When bonds are issued under this 2 chapter, they shall be offered for sale and shall be sold by the 3 issuing officials to the highest and best bidder or bidders 4 after due public advertisement, on such terms and conditions and 5 upon such open competitive bidding as the issuing officials 6 shall direct. The manner and character of advertisement and the 7 times of advertising shall be prescribed by the issuing 8 officials. 9 (b) Private sale.--Any portion of any bond issue offered 10 under subsection (a) and not sold or subscribed for may be 11 disposed of by private sale by the issuing officials, in a 12 manner and at prices as the Governor shall direct. 13 (c) Series.--When bonds are issued from time to time, the 14 bonds of each issue shall constitute a separate series to be 15 designated by the issuing officials or may be combined for sale 16 as one series with other general obligation bonds of the 17 Commonwealth. 18 Section 2925. Refunding bonds. 19 The issuing officials are hereby authorized to provide by 20 resolution for the issuance of refunding bonds for the purpose 21 of refunding any bonds issued under the provisions of this 22 chapter and then outstanding, either by voluntary exchange with 23 the holders of such outstanding bonds with accrued interest and 24 any premium payable thereon, at maturity or at any call date. 25 The issuance of refunding bonds, the maturities and other 26 details thereof, the rights of the holders thereof and the 27 duties of the issuing officials in respect to refunding bonds 28 shall be governed by the provisions of this chapter, insofar as 29 the provisions may be applicable. Refunding bonds may be issued 30 by the issuing officials to refund bonds originally issued or to 20030H0953B1119 - 10 -
1 refund bonds previously issued for refunding purposes. 2 Section 2926. Registration of bonds. 3 The Auditor General shall prepare the necessary registry book 4 to be kept in the office of the duly authorized loan and 5 transfer agent of the Commonwealth for the registration of any 6 bonds, at the request of owners thereof, according to the terms 7 and conditions of issue directed by the issuing officials. All 8 bonds which are issued under this chapter without interest 9 coupons attached shall be registered in the registry books kept 10 by the duly authorized loan and transfer agent of the 11 Commonwealth. 12 Section 2927. Appropriation. 13 The sum of $15,000,000 is hereby appropriated to the Securing 14 Health Care Assistance For Retired Employees Trust Fund for the 15 fiscal year July 1, 2003, to June 30, 2004, from the Health 16 Endowment Account for Long-Term Hope established in section 17 303(b) of this act. 18 SUBCHAPTER M 19 MISCELLANEOUS PROVISIONS 20 Section 2991. Inconsistencies. 21 If there is an inconsistency between a provision of this 22 chapter and another provision of this act, the provision of this 23 chapter shall control. 24 Section 3. This act shall take effect in 60 days. B26L35JLW/20030H0953B1119 - 11 -