Congress includes one-year extension of black lung excise tax in omnibus spending bill

A one-year extension of the excise tax that funds the Black Lung Disability Trust Fund is included in the 2021 omnibus spending bill. This is the second year in a row that a one-year extension has been included in the spending bill on the brink of expiration.

The one-year extension comes as a great relief to Black Lung Associations and other advocates. Over the last year and a half, legislation to extend the excise tax for ten years (H.R. 3876, S. 3172) has stalled and has not been prioritized by Congress. As a result, throughout the fall, BLA members met with their representatives and senators and sent a letter to congressional leadership to urge them to pass another one-year extension.

“It is tough. Every year we trek to D.C. to get a continuance and it seems like each year the trust fund is going further into debt because more companies are filing bankruptcy,” said Gary Hairston, President of the National Black Lung Association. “A ten-year extension would allow us to not have to worry about it each year and if it will be included in a tax extenders bill. Every year we go up there, and they say something will happen, but instead they do nothing while more companies are filing for bankruptcy, placing the fund further into debt.”

Since 2018, Black Lung Associations and other leaders have been pushing Congress to take action to ensure the long-term solvency of the fund. In addition to a ten-year extension of the excise tax, Congress should also consider other forms of revenue to ensure the fund’s solvency, such as closing a statutory loophole that allows companies to avoid paying taxes on exported coal. Currently, the excise tax is only applied to domestic coal sales.

“There should be an excise tax applied to exported coal. This could help to ensure miners never had to worry about the funds in the trust fund,” said Vonda Robinson, Vice President of the National Black Lung Association. “Not taxing the exported coal is just really robbing the miners of money that they deserve. The coal is still processed in the same way, and it doesn’t matter where it is going: it is still manufactured and processed in the states and the miners are still being exposed to dust and developing black lung.”

In his campaign, President-elect Joe Biden promised to support miners with black lung disease by increasing coal company payments into the black lung benefits program and improving the black lung benefits system. In addition, Biden should also increase the modest benefit amount that a miner receives after being disabled by this fatal disease. Thousands of miners and their families depend on the modest living stipend and health benefits provided by the trust fund, yet a miner without any beneficiaries receives a living stipend that is less than $9,000 a year while a miner with three or more dependents receives less than $16,500 annually.

As Robinson notes, “Each year we have to go to D.C. for this, and the men are getting older and sicker.”

Background:

Rates of black lung disease have hit a 25-year high in Appalachian coal mining states, and have reached epidemic levels in coal communities across the nation.

Coal miners and their widows who are able to prove that they are disabled from black lung are entitled by law to modest living and medical benefits, after what can be an excruciating legal process that sometimes outlasts the life of the miner. The Black Lung Disability Trust Fund pays for benefits to coal miners and their surviving dependents in cases where the miners’ employer has gone bankrupt or not been found responsible.

The trust fund is more important now than ever because a wave of bankruptcies in the coal industry has created increased pressure. 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. Congress allowed the rate to be cut in half at the end of 2018 in spite of a May 2018 Government Accountability Office Report that projected that, at the slashed rate that went into effect, the fund’s revenue would be unable to cover beneficiary payments and administrative costs as soon as 2020. Congress reinstated the historic rate of the tax for one year at the end of 2019.

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Appalachian Voices is a leading nonprofit advocate for a healthy environment and just economy in the Appalachian region, and a driving force in America’s shift from fossil fuels to a clean energy future.