PRINTER'S NO. 1363
No. 991 Session of 2005
INTRODUCED BY BOSCOLA, LAVALLE, BROWNE, COSTA, RAFFERTY, KITCHEN, RHOADES, KASUNIC, MUSTO, STOUT AND FONTANA, NOVEMBER 15, 2005
REFERRED TO BANKING AND INSURANCE, NOVEMBER 15, 2005
AN ACT 1 Providing for health care assistance for certain steelworkers; 2 establishing the Steelworker Health Care Assistance Retiree 3 Board and the Steelworker Health Care Assistance Retiree 4 Trust Fund; providing for issuance of bonds and for an annual 5 transfer of funds; and making a repeal. 6 TABLE OF CONTENTS 7 Section 1. Short title. 8 Section 2. Declaration of policy. 9 Section 3. Definitions. 10 Section 4. Steelworker Health Care Assistance Retiree Board. 11 Section 5. Powers and duties of Steelworker Health Care 12 Assistance Retiree Board. 13 Section 6. Steelworker Health Care Assistance Retiree Program. 14 Section 7. Steelworker Health Care Assistance Retiree Trust 15 Fund. 16 Section 8. Authority to borrow. 17 Section 9. Bonds, issue, maturity, interest, etc. 18 Section 10. Sale of bonds. 19 Section 11. Refunding bonds.
1 Section 12. Registration of bonds. 2 Section 13. Transfer of funds. 3 Section 14. Repeal. 4 Section 15. Effective date. 5 The General Assembly of the Commonwealth of Pennsylvania 6 hereby enacts as follows: 7 Section 1. Short title. 8 This act shall be known and may be cited as the Steelworker 9 Health Care Assistance Retiree Exemption Act. 10 Section 2. Declaration of policy. 11 The General Assembly finds and declares as follows: 12 (1) That there exists a crisis in the steel industry 13 caused by the collapse of the Russian and Asian domestic 14 steel markets and the subsequent dumping of their steel in 15 the United States, much of it in violation of Federal trade 16 laws. The results are significant and are a link to the 17 potential loss of our entire steel industry. 18 (2) Since January 1997, a total of 54,000 steelworker 19 jobs have been lost. 20 (3) Thirty-five companies have filed for bankruptcy, 21 representing approximately 30% of the country's steelmaking 22 capacity. 23 (4) Companies posted operating losses of $1.3 billion 24 during the first nine months of 2001. 25 (5) Steel prices have fallen to unprecedented levels and 26 despite a slight recovery due to the Federal Government's 27 section 201 tariff program are still below their 20-year 28 average. 29 (6) Approximately 600,000 retirees and dependents rely 30 on the domestic steel industry for health care benefits. 20050S0991B1363 - 2 -
1 (7) Pennsylvania steelworkers helped to build this 2 country's economy, and the production of steel added greatly 3 to our national defense and forged a strong sense of security 4 in this Commonwealth. 5 (8) As of March 31, 2002, over 20,000 retired LTV 6 Corporation retirees lost their health coverage due to the 7 Voluntary Employees Beneficiary Association decision to not 8 ensure claims. 9 (9) Bethlehem Steel has announced plans to terminate 10 benefits for its retirees, 40,000 of whom are Pennsylvania 11 residents. 12 (10) The loss of benefits makes the need for decisive 13 action at the State level more urgent. Pennsylvania has a 14 clear and compelling interest to aid this population of 15 retirees. 16 Section 3. Definitions. 17 The following words and phrases when used in this act shall 18 have the meanings given to them in this section unless the 19 context clearly indicates otherwise: 20 "Board." The Steelworker Health Care Assistance Retiree 21 Board established under section 4 (relating to Steelworker 22 Health Care Assistance Retiree Board). 23 "Contractor." The term as it is defined under section 2303 24 of the act of May 17, 1921 (P.L.682, No.284), known as The 25 Insurance Company Law of 1921. 26 "Department." The Department of Labor and Industry of the 27 Commonwealth. 28 "Eligible retiree." A resident of this Commonwealth who is a 29 retiree of a steel company that paid health care benefits 30 administered by the Voluntary Employees Beneficiary Association, 20050S0991B1363 - 3 -
1 expired as of March 31, 2002. The term shall also include the 2 surviving spouse and any dependent of such retiree. 3 "Fund." The Steelworker Health Care Assistance Retiree Trust 4 Fund established under section 7 (relating to Steelworker Health 5 Care Assistance Retiree Trust Fund). 6 "Medicare." The Federal program established under Title 7 XVIII of the Social Security Act (49 Stat. 620, 42 U.S.C. § 1395 8 et seq.). 9 "PACE." The Pharmaceutical Assistance Contract for the 10 Elderly program provided for in Chapter 5 of the act of August 11 26, 1971 (P.L.351, No.91), known as the State Lottery Law. 12 "PACENET." The Pharmaceutical Assistance Contract for the 13 Elderly Needs Enhancement Tier program provided for in Chapter 5 14 of the act of August 26, 1971 (P.L.351, No.91), known as the 15 State Lottery Law. 16 "Program." The Steelworker Health Care Assistance Retiree 17 Program established under section 6 (relating to Steelworker 18 Health Care Assistance Retiree Program). 19 Section 4. Steelworker Health Care Assistance Retiree Board. 20 (a) Establishment.--The Steelworker Health Care Assistance 21 Retiree Board is established as a departmental board under the 22 department. 23 (b) Membership.--The board shall consist of the following 24 members: 25 (1) One member appointed by the Majority Leader of the 26 Senate. 27 (2) One member appointed by the Minority Leader of the 28 Senate. 29 (3) One member appointed by the Majority Leader of the 30 House of Representatives. 20050S0991B1363 - 4 -
1 (4) One member appointed by the Minority Leader of the 2 House of Representatives. 3 (5) The Secretary of Labor and Industry or his designee. 4 (6) The Insurance Commissioner or his designee. 5 (7) One member from the International United 6 Steelworkers of America Union appointed by the Governor. 7 (8) One member appointed by the Governor. 8 (9) One member from the Steelworkers Organization of 9 Active Retirees appointed by the Governor. 10 (c) Compensation.--Members of the board shall receive no 11 compensation for their services but shall be reimbursed for 12 their necessary expenses incurred while serving as board 13 members. 14 (d) Vacancies.--A vacancy on the board shall be filled by 15 the appointing authority for the balance of the term. 16 (e) Terms of members.--Members of the board shall serve 17 terms of four years and until a successor is appointed and 18 qualified. Members may serve only two consecutive full terms. A 19 member of the board may be removed by the department or by a 20 majority of the other board members for malfeasance in office, 21 failure to attend regularly scheduled meetings or any cause that 22 renders the member incapable of or unfit to discharge his 23 duties. 24 (f) Meetings.--Meetings of the board shall be subject to 65 25 Pa.C.S. Ch. 7 (relating to open meetings) and the act of June 26 21, 1957 (P.L.390, No.212), referred to as the Right-to-Know 27 Law. A quorum for a meeting shall be a majority of the total 28 membership of the board. Any action of the board requires the 29 affirmative vote of a majority of a quorum. 30 Section 5. Powers and duties of Steelworker Health Care 20050S0991B1363 - 5 -
1 Assistance Retiree Board. 2 The board shall: 3 (1) Implement a health care benefits program pursuant to 4 section 6 (relating to Steelworker Health Care Assistance 5 Retiree Program). 6 (2) Administer the fund established under section 7 7 (relating to Steelworker Health Care Assistance Retiree Trust 8 Fund). 9 Section 6. Steelworker Health Care Assistance Retiree Program. 10 (a) Implementation.--The board shall implement the 11 Steelworker Health Care Assistance Retiree Program to provide 12 group health plans for eligible retirees. 13 (b) Structure.--The board shall model the structure of the 14 program on the structure of the children's health insurance 15 program under Article XXIII of the act of May 17, 1921 (P.L.682, 16 No.284), known as The Insurance Company Law of 1921. The board 17 shall structure the program so that it includes the following 18 provisions: 19 (1) Eligible retirees who are eligible to receive 20 Medicare must enroll or continue to be enrolled in a Medicare 21 program. The program shall provide for the enrollment of the 22 eligible retirees who are eligible to receive Medicare in a 23 commercially available Medicare supplement plan. The program 24 shall provide for the enrollment of eligible retirees who are 25 eligible to receive Medicare in a commercially available 26 prescription drug coverage plan to provide for prescription 27 drugs not covered under PACE or PACENET. The board shall set 28 the amount of monthly premiums to be paid by eligible 29 retirees who are eligible to receive Medicare and the amount 30 of copayment required for prescription drugs. 20050S0991B1363 - 6 -
1 (2) Eligible retirees who are not eligible for Medicare 2 may enroll in a commercially available health care plan that 3 offers a comprehensive benefit package and a commercially 4 available prescription drug coverage plan with coverages and 5 benefits similar to those they had or did receive from their 6 prior employer. The board shall set the amount of monthly 7 premiums to be paid by eligible retirees who are not eligible 8 for Medicare and the amount of copayment required for 9 prescription drugs. Any eligible retiree under this paragraph 10 who subsequently becomes eligible for Medicare must satisfy 11 the requirements of paragraph (1) and any other requirements 12 set 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 18 contractors participate in the program. 19 (c) Comparable program.--If the Federal Government enacts a 20 program providing benefits comparable to those contained in this 21 act as determined by the Steelworker Health Care Assistance 22 Retiree Board, then the program established by this act shall be 23 discontinued. 24 (d) Modification of program.--If the Federal Government 25 enacts a program which the Steelworkers Health Care Assistance 26 Retiree Board determines not to be comparable to the program 27 established by this act, the board may provide additional group 28 health plan coverage and benefits which supplement any such 29 program. 30 Section 7. Steelworker Health Care Assistance Retiree Trust 20050S0991B1363 - 7 -
1 Fund. 2 (a) Establishment.--The Steelworker Health Care Assistance 3 Retiree Trust Fund is established in the State Treasury. The 4 fund shall be administered by the board. All interest earned 5 from the investment or deposit of moneys accumulated in the fund 6 shall be deposited in the fund for the same use. 7 (b) Funds.--All moneys deposited into the fund shall be held 8 in trust, shall not be considered general revenue of the 9 Commonwealth and are hereby appropriated on a continuing basis 10 to effectuate the purposes of this act as determined by the 11 board. 12 (c) Source of fund.--The proceeds realized from the sale of 13 bonds under this act shall be paid into the fund and are hereby 14 specifically dedicated to the purpose of this act. The moneys 15 shall be paid periodically by the State Treasurer to the board 16 at such times and in such amounts as may be necessary to satisfy 17 the purpose of this act. 18 Section 8. Authority to borrow. 19 The issuing officials shall borrow, on the credit of the 20 Commonwealth, such sum or sums of money not exceeding in the 21 aggregate the sum of $225,000,000 as may be necessary to carry 22 out the purposes of this act. 23 Section 9. Bonds, issue, maturity, interest, etc. 24 (a) Issuance.--As evidence of the indebtedness authorized in 25 this act, general obligation bonds of the Commonwealth shall be 26 issued for such total amount, in such forms, in such 27 denominations and subject to such terms and conditions of issue, 28 redemption and maturity, rate or rates of interest and time of 29 payment of interest as the issuing officials shall direct, 30 except that the latest stated maturity date shall not exceed 25 20050S0991B1363 - 8 -
1 years from the date of the bond first issued for each such 2 series. 3 (b) Signatures and seal.--All bonds issued under the 4 authority of this act 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 act shall be direct obligations of 11 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 act shall be exempt from taxation for State 16 and local purposes. The principal of and interest on such bonds 17 shall be payable in lawful money of the United States of 18 America. 19 (d) Form.--Bonds issued under this act 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 act in substantial 26 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, 20050S0991B1363 - 9 -
1 there to remain until sold in accordance with the provisions of 2 this act. 3 Section 10. Sale of bonds. 4 (a) Offering for sale.--When bonds are issued under this 5 act, 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 such 15 manner and at such 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 11. 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 act 25 and then outstanding, either by voluntary exchange with the 26 holders of such outstanding bonds with accrued interest and any 27 premium payable thereon, at maturity or at any call date. The 28 issuance of refunding bonds, the maturities and other details 29 thereof, the rights of the holders thereof and the duties of the 30 issuing officials in respect to refunding bonds shall be 20050S0991B1363 - 10 -
1 governed by the provisions of this act, insofar as they may be 2 applicable. Refunding bonds may be issued by the issuing 3 officials to refund bonds originally issued or to refund bonds 4 previously issued for refunding purposes. 5 Section 12. 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 act without interest coupons 12 attached shall be registered in the registry books kept by the 13 duly authorized loan and transfer agent of the Commonwealth. 14 Section 13. Transfer of funds. 15 The sum of $15,000,000 shall be transferred annually from the 16 Health Endowment Account for Long-Term Hope established in 17 section 303(b) of the act of June 26, 2001 (P.L.755, No.77), 18 known as the Tobacco Settlement Act, to the Steelworker Health 19 Care Assistance Retiree Trust Fund. 20 Section 14. Repeal. 21 The act of June 26, 2001 (P.L.755, No.77), known as the 22 Tobacco Settlement Act, is repealed insofar as it is 23 inconsistent with this act. 24 Section 15. Effective date. 25 This act shall take effect immediately. L15L40DMS/20050S0991B1363 - 11 -