The Black Lung Excise Tax on Coal

RS21935 -- The Black Lung Excise Tax on Coal

September 15, 2004

Summary

The Black Lung Excise Tax (BLET) on coal has been in effect since 1978 and finances the Black Lung Disability Trust Fund. An estimated $14,000 million in coal excise tax revenues have gone into the fund through FY2004. The fund compensates miners (as well as their survivors and dependents) afflicted with pneumoconiosis, or "black lung disease," pays their medical costs, and finances the costs of administering the program. In 1998 a U.S. district court ruled that the black lung excise tax on coal exports violated the export clause of the U.S. Constitution. Of the estimated $1,300 million of taxes collected on coal exports, an estimated $270 million would have to be (or has been) refunded. The remainder, approximately $1,000 million of unconstitutionally collected taxes, cannot be refunded due to statute of limitation of the filing of valid and timely claims. In the 108th Congress two bills have been introduced relating to the black lung excise tax. The President's FY2005 budget proposes to repeal the scheduled reduction in tax rates for coal sales after December 31, 2014. In addition to the black lung tax, coal producers pay a federal Abandoned Mine Land Reclamation Fee -- absent reauthorization, this is scheduled to expire on October 1, 2004 -- and state severance taxes. This report will not be updated.