AP NEWS

Bill revamping black lung system wins final passage

March 31, 2017

FRANKFORT, Ky. (AP) — Kentucky lawmakers completed quick work Thursday evening on a proposal championed by the Senate’s top leader to reduce the beleaguered coal industry’s costs to cover claims by workers suffering from black lung disease.

The plan, presented by Republican Senate President Robert Stivers, was in the works for weeks but surfaced on the final day of the 2017 legislative session.

It beat the clock by making a quick trip through the General Assembly. The proposal cleared the Senate on a 38-0 vote, followed by final passage in the House on an 86-3 vote. The measure now goes to Gov. Matt Bevin.

The bill would change how future black lung claims are paid by reducing and phasing out assessments paid by coal companies to help cover claims. As the coal sector has shrunk, it has left fewer businesses to pay higher assessment rates.

There would be no changes in benefits for ailing coal workers, advocates said.

In typical end-of-the session maneuvering, the proposal was attached to a little-noticed bill dealing with the Workers’ Compensation Funding Commission.

In touting the plan to his Senate colleagues, Stivers said the failure to relieve coal companies of the black lung-related assessments would drive “another nail in the coffin of an industry that’s meant a lot.”

Later, in a sign of the bill’s bipartisan support, House Minority Floor Leader Rocky Adkins, D-Sandy Hook, told colleagues he has a “comfort level” that the changes will help the coal industry and protect current and future black lung claims.

As coal operations have shed thousands of jobs in recent years, the industry’s downturn has led to a spike in the number of out-of-work miners filing workers compensation claims.

That has resulted in sharply higher costs for coal businesses that have survived the industry’s downturn. Some companies have seen 200 percent to 300 percent increases in their assessments to help cover black lung costs, Stivers said.

“It has put a real strain on the industry, almost untenable,” Stivers told the Senate Economic Development, Tourism and Labor Committee earlier in the day.

Stivers said the plan had undergone close scrutiny to review its impact.

“We have looked at this actuarially every way possible to make sure that what we are doing is actuarially sound for the industry and for the individuals involved,” said Stivers, a Republican from Manchester.

During the House debate, Rep. Lynn Bechler expressed frustration that the proposal was offered so late in the session and without more time to study it.

“I think a measure of this magnitude should be vetted a little bit more,” said Bechler, R-Marion.

Under Stivers’ plan, coal businesses would continue paying into the black-lung fund for an estimated two more years. The proposal would sharply reduce the amount of those assessments until those payments are phased out. The fund is supported in part by assessments on every ton of coal produced in the state.

The fund currently has about $15 million to $20 million in assets and about twice that much in liabilities, the bill’s supporters said. In July, the fund’s assets and liabilities would be transferred to the quasi-public Kentucky Employers’ Mutual Insurance group to manage if the proposal becomes law.

Meanwhile, future black-lung claims would be covered completely by the workers comp insurance policies purchased by coal companies. Currently, those policies cover half those costs, while the separate black-lung fund covers the rest, coal industry officials said. Stivers predicted that coal companies would face only slight increases in insurance costs as a result.

Rusty Ashcraft, an executive with Alliance Coal, which has about 2,000 employees in Kentucky, said the changes would bring needed relief to the state’s coal sector. The assessments have been far outpacing the amounts that operators pay out for black-lung claims, he said.

“It will enable us to continue to maintain our current level of production, hopefully until market conditions improve,” he said.

The state’s coal industry has lost about 11,000 mining jobs in the past decade, he said.

The coal sector has been reeling from pollution restrictions and growing competition from natural gas, wind and solar.

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The legislation is House Bill 377.