FOR IMMEDIATE RELEASE
CONTACT: Michael Catanzaro
February 26, 2014
Washington, DC — Large Public Power Council (LPPC) Chairman Bill Gaines released the following statement in response to House Ways and Means Committee Chairman Dave Camp’s recent tax reform proposal:
“We appreciate Chairman Camp’s efforts to reform the federal tax code. However as highlighted throughout the Ways and Means Committee working group process, we remain concerned that taxing municipal bonds for the first time in history would be counterproductive. The proposal released today would place a new 10 percent tax on interest from municipal bonds, which would have a significant impact on public power utility customers and future investments in critical infrastructure.
“Public power electric utilities rely on municipal bond-financed projects to keep the lights on and the drinking water flowing for millions of American families. State and local governments also rely on municipal bonds as a critical tool for infrastructure investment.
“Large public power systems alone expect to issue nearly $20 billion in tax-exempt bonds over the next five years to finance the building and improvement of generation, transmission and reliability facilities. The new tax on municipal bonds proposed by Chairman Camp is an unprecedented change and levies an ultimately regressive federal tax on utilities and state and local governments and the citizens they serve. This provision will be disproportionately borne by small businesses and low or fixed income households who can least afford it.
“In addition, the draft would eliminate the ability to advance refund bonds on a tax-exempt basis, which would expose our customers to further added costs and remove an important tool used responsibly to refinance capital expenditures.
“Congress should maintain the current tax exemption on municipal bond interest so that public power can continue to invest in critical infrastructure while keeping power prices affordable for American families. We look forward to continuing to work with the Committee as it works toward comprehensive tax reform.”
LPPC represents 26 of the largest locally owned and operated not-for-profit electric systems in the United States. Our member utilities are located in 12 states and Puerto Rico and own and operate more than 86,000 megawatts of generation capacity and more than 35,000 circuit miles of high voltage transmission lines. LPPC member utilities supply electricity to some of the largest cities in the country including Los Angeles, Seattle, Omaha, Phoenix, Sacramento, Jacksonville, San Antonio, Orlando and Austin.