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What is House Bill H.R. 6377?

This bill — the Save Community Newspaper Act — would allow community newspapers to choose alternative minimum funding standards for the defined benefit pension plans they maintain, effectively reducing their contribute. Relief would include a 30-year period to amortize pension shortfalls (rather than the current 7-year period) and interest rates set on the U.S. Treasury yield curve rather than 8 percent. Eligible community newspapers would have to be privately-owned by residents of the state, family-owned for at least 30 years, a non-profit, held in a state trust, or a combination of the above. Eligible pension plans would have to be “frozen” — meaning they no longer accept new entrants.

Publicly-traded media companies or corporations that own newspapers that own newspapers in multiple states would be ineligible for relief.

Impact

Consumers of local news; community newspapers; and federal pension regulators.

Cost of House Bill H.R. 6377

The CBO estimates that enacting this bill would increase revenues by $13 million from receipts of premium payments and reduce spending by $21 million over the 2019-2028 period.

More Information

In-Depth: Rep. Erik Paulsen (R-MN) introduced this bill to “provide targeted relief to community newspaper pension plans” as they struggle to fulfill their pension obligations amid decreased employment in the industry. At a committee markup for his bill, Paulsen said:

“During a time of sweeping industry consolidation and change where newspapers are bought by larger groups and online platforms are competing with traditional print, these organizations are committed to investing in the business and ushering the business model into the 21st century. By changing the pension funding mechanism, these newspapers will have the certainty they need to make payments to fund their plan.”

The newspaper industry has experienced challenges in recent years that have made fulfilling pension obligations difficult for some companies, as explained by the Minneapolis StarTribune:

“Newspaper companies face a challenge in generating enough money from current operations to keep up with pension obligations that accumulated when the industry employed more people. Total employment in the industry dropped from about 400,000 in 2008 to just under 175,000 in 2018, according to the News Media Alliance, which represents 2,000 U.S. news organizations.”

This legislation passed the House Ways and Means Committee on a voice vote and has the support of six bipartisan cosponsors, including four Republicans and two Democrats.

Media:

Summary by Eric Revell

(Photo Credit: iStock.com / Zerbor)