House advances legislation to update tax policy, pension premiums for electric co-ops
The U.S. House of Representatives advanced Tuesday FY2020 spending legislation that included provisions that would modify tax policy and protect electric rates for electric cooperatives.
The bipartisan RURAL Act would that co-ops do not lose their tax-exempt status if they accept government grants for storm restoration or broadband.
The SECURE Act would lower the premiums that electric co-ops pay to the Pension Benefit Guaranty Corporation (PBGC) for low-risk defined benefit pension plans.
The legislation would also repeal the “parking lot tax,” which would have assessed taxes on approximately one-third of U.S. electric co-ops.
“We’re thrilled and thankful that Congress recognizes the importance of addressing the taxing problems that could handcuff electric co-ops and America’s rural communities,” National Rural Electric Cooperative Association (NRECA) CEO Jim Matheson said. “This package preserves the fundamental nature of the electric cooperative business model and will save electric co-ops tens of millions of dollars each year. Moreover, it protects co-op members from unfair increases in their electric rates and provides certainty to co-ops that leverage federal and state grants for economic development, storm recovery, and rural broadband deployment. We’re grateful to Sens. Rob Portman and Tina Smith, along with Reps. Terri Sewell and Adrian Smith for shepherding this bill through Congress.”
