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March 8, 1991


The opinion of the court was delivered by: FOREMAN


 This is a suit to recover coal excise taxes paid by plaintiff Darrell Davis d/b/a Davis Enterprises (Davis Enterprises) for the first quarter of 1981 and by plaintiff Midwest Coal Corporation *fn1" (Midwest Coal) for the third quarter of 1986. Before the Court are cross-motions for summary judgment. The parties are in agreement over the facts surrounding this dispute. They disagree, however, whether these facts require plaintiffs to pay the coal excise tax.

 Between 1914 and 1952, Peabody Coal Company operated a coal mine called the Harco Mine near Harrisburg, Illinois. The coal mined by Peabody at the Harco mine was never subject to the coal excise tax in question, since that tax became effective in 1978. See Pub.L. 95-227, § 2(a), 92 Stat. 11 (1978).

 Davis Enterprises and, subsequently, Midwest Coal operated a coal reprocessing plant which extracted or reclaimed coal from coal waste refuse piles abandoned by Peabody Coal Company, including the Harco mine. In order to reclaim coal from the coal waste refuse piles, Davis Enterprises and Midwest Coal used a paddle wheel scraper to pick up the refuse, coal, gravel, dirt and other debris from the refuse piles and place this material into a large hopper. The material was then moved from the hopper by a conveyor belt through a crusher.

 At the point where the crusher started working, water was poured on the coal. The coal and other materials were then dropped into a water solution. The heavier materials would drop through the bottom and the coal was then separated. After separation, the coal was dried, moved out of the plant, stored and made ready for shipment. This coal was sold primarily to power generating plants.

 As part of the Black Lung Benefits Revenue Act of 1977, Congress imposed an excise tax "on coal from mines located in the United States sold by the producer. . . ." 26 U.S.C. § 4121(a). The Act did not define who was a producer; however, regulations promulgated by the Secretary of Treasury state that "the term includes any person who extracts coal from coal waste refuse piles or from the silt waste product which results from the wet washing (or similar processing) of coal." Treas. Reg. § 48.4121-1(a)(1) (1980); *fn2" see also Treas. Reg. § 48.4121-1(a)(2) example 3 (1980). Davis Enterprises and Midwest Coal do not argue that their operation does not fall within this definition of producer. Rather, they argue that the regulation itself is invalid because it is inconsistent with the Black Lung Revenue Act.

 The Secretary of the Treasury is authorized to promulgate all rules and regulations necessary for the enforcement of the Internal Revenue Code. 26 U.S.C. § 7805(a). The Supreme Court has indicated that these Treasury Regulations

command our respect, for Congress has delegated to the Secretary of the Treasury, not to this Court, the task of "administering the tax laws of the Nation." We therefore must defer to Treasury Regulations that "implement the congressional mandate in some reasonable manner." To put the same principle conversely, Treasury Regulations "must be sustained unless unreasonable and plainly inconsistent with revenue statutes."

 Commissioner of Internal Revenue v. Portland Cement Co. of Utah, 450 U.S. 156, 169, 101 S. Ct. 1037, 1045, 67 L. Ed. 2d 140 (1981) [internal citations omitted].

 In determining whether a particular Treasury Regulation implements the congressional mandate, a court should consider whether the regulation was written contemporaneously with the legislation, the length of time the regulation has been in effect, the reliance placed on the regulation, the consistency of Commissioner's interpretation, and the amount of attention Congress has devoted to the regulation in subsequent re-enactments of the statute. National Muffler Dealers Association v. United States, 440 U.S. 472, 477, 99 S. Ct. 1304, 1307, 59 L. Ed. 2d 519 (1979).

 The regulation promulgated by the Secretary defines a producer as "the person in whom is vested ownership of the coal immediately after the coal is severed from the ground, without regard to the existence of any contractual arrangement for the sale or other disposition of the coal or the payment of any royalties between the producers and third parties." Treas. Reg. § 48.4121-1(a)(1) (1980). The regulation further explicitly included an additional category of producers: those who extract coal from coal waste refuse piles or silt waste product. Id.

 The rationale for this regulation was stated in a private letter ruling by the Secretary:

Section 4121 was added to the Code by the Black Lung Benefits Revenue Act of 1977. It was enacted as a financing measure to provide revenue for black lung benefits paid by the federal government pursuant to Title IV of the Federal Mine Safety and Health Act of 1977. Title IV provides for benefits to be paid to coal miners and coal mine employees who are totally disabled due to pneumonicosis, or "black lung", that occurs as a result of employment in a coal mine or coal preparation facility. Generally, the employer is responsible for providing such payments, but in certain cases, such as when there is no responsible employer, the Act and the Internal Revenue Code provide for benefits to be paid to the disabled miner by the federal government through either the Secretary of Labor or the Secretary of Health and Human Services. See Federal Mine Safety and Health Act of 1977, section 411(a), 30 U.S.C.A. section 921(a) (Supp.1983); section 9501(d) of the Code. In order to provide a mechanism by which such payments could be financed, Congress enacted the Black Lung Benefits Revenue Act of 1977 which established a trust fund, called the Black Lung Disability Trust Fund, out of which the payments would be made. In addition, the Act added ...

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