The House and the Senate are each considering companion bills aimed at reducing the costs of financing renewable energy projects. In the Senate, Chris Coons (D-Del) introduced on June 7 the Master Limited Partnerships Parity Act. A bipartisan effort with Senator Jerry Moran (R-KS) and five others, this legislation would expand the definition of “qualified” sources in Section 7704(d)(1) of the Internal Revenue Code to include revenue from clean energy resources and infrastructure projects as qualifying income of a Master Limited Partnership or MLP. An MLP is a business structure that is taxed as a partnership, but whose ownership interests are traded on a market like corporate stock. Critics of the current law claim that the use of MLPs is difficult if not impossible for those seeking to invest in “inexhaustible” natural resources such as wind and solar, but at the same time recognizes investments in “exhaustible” resources like coal and natural gas. The proposed legislation would, according to its sponsors, level the playing field by specifically including energy technologies that qualify for special tax treatment under Sections 45 and 48 of the tax code, including wind, closed and open loop biomass, geothermal, solar, municipal solid waste, hydropower, marine and hydrokinetic, fuel cells, and combined heat and power. The bill, S. 3275, has been referred to the Senate Committee on Finance. A copy of Senator Coon’s floor statement, which includes an illustrative description and history of MLPs can be accessed HERE.
On September 19, a bipartisan companion bill (identical to S. 3275) was introduced in the House by Representatives Ted Poe (R-Tx) and Mike Thompson (D-Ca) and referred to House Ways and Means. (View HERE)
Related information may be found as follows:
Our client, International District Energy Association’s web site, www.districtenergy.org