LEGISLATION WILL HELP RETIRED STEELWORKERS
AND THE STEEL INDUSTRY

Thursday, May 2, 2002 - Washington, D.C. - U.S. Representative Mike Doyle (PA-18) joined other Members of Congress at a press conference today in introducing the Steel Industry Legacy Relief Act of 2002, which will address the problem of steel industry "legacy costs" by creating a program of health insurance including a prescription drug benefit for retirees and their beneficiaries.

"For too many years, our nation's steelworkers dedicated their blood, sweat, and tears to the steel industry with the promise of health care benefits and a pension when they retired," stated Doyle. "This legislation would provide the necessary measures for the steel industry to meet their commitments to these legacy costs as well as encourage consolidation which will help to create a stronger, more cost-effective steel industry in our country."

The primary aim of the Steel Industry Legacy Relief Act is to secure health insurance for several hundred thousand retirees who have or soon will lose all retiree benefits. Secondly, the bill seeks to strengthen the American steel industry by not only removing the weight of "legacy costs" as a barrier to their merging, but does so in ways to encourage American firms to create the kinds of larger companies now operating in Europe and Asia. Lastly, this legislation seeks a preference for American steel companies. This is provided by a "right of first refusal" on the purchase of other American steel companies to other existing steel companies.

"Members of Congress, the steel industry, and steelworkers across America have stood together against years of illegal foreign steel dumping that has ravaged our manufacturing and the people whose lives depend on it. While we have seen some success, we must continue to remain united in our efforts to ensure steelworkers and their spouses receive the benefits for which they are entitled," said Doyle, who has been a member of the House Steel Caucus since first coming to Congress in 1995.

The program established under the Steel Industry Legacy Relief Act will be administered by the Department of Commerce by a seven-person Board consisting of two representatives of the steel industry, two representatives of the United Steelworkers of America, and three designated jointly by the industry and union representatives.

The program directs the Board to provide health coverage similar to a Medicare level of coverage and a prescription drug benefit similar to the benefits in the federal plan, "The Blue Cross/Blue Shield Standard Plan."

The program will be funded through the establishment of a Trust Fund, which will obligate steel companies, their retirees, and/or the federal government, as the case may be, to pay the following amounts into the Trust Fund for the payment of program benefits:

1. From the three years of tariffs on steel imports announced by President Bush in the steel Section 201 proceeding;
2. From companies whose retirees are enrolled in the program through Voluntary Employee Benefit Association (VEBA) trust funds from bankrupt companies;
3. From the owners of the acquiring steel companies, a surcharge of $5 per ton of products shipped that are produced with acquired steel-making assets paid by companies that acquire assets whose retirees are included in the program; and
4. Such additional amounts from the general treasury of the United States as necessary for the program.

To obtain Program benefits, a retiree must meet certain eligibility conditions, and his or her former employer must undergo a "qualifying event." The retiree, who may have been union or non-union, hourly or salaried, must have met the years of service requirement of the retiree health plan maintained by the company from which he or she retired. In addition, the company must have been operating as of January 1, 2000, and have experienced any one of the following qualifying events:

1. A permanent closing occurring any time after January 1, 2000, and before January 1, 2004;
2. An American steel company acquired their company;
3. The steel company is bought after a U.S. company passed on acquisition;
4. A bankrupt company sells off at least 50% of steel making; and
5. The Secretary of Commerce acknowledges the bankrupt company has made a "good faith" effort to be sold.

After 200,000 steel retirees and beneficiaries have been enrolled in the program, all steel companies that have not previously qualified may enroll their retirees into the program. This provision will prevent competitive disadvantage.

The Steel Industry Legacy Relief Act has broad industry and union support.

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