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November 22, 2013

Joint Tax Scores MLP Legislation


This week, the non-partisan Joint Committee on Taxation released its score of S. 795, the Master Limited Partnerships Parity Act, a bi-partisan bill introduced by Senator Chris Coons (D-DE) earlier this year. The Committee estimated that the bill would cost $1.3 billion over ten years. Reportedly, Senator Coons welcomed the score and has committed to trying to find an offset or spending cut to pay for it. The Chair of the Senate Finance Committee's Subcommittee on Energy, Natural Resources and Infrastructure, Senator Debbie Stabenow (D-MI), has publicly stated her support for the legislation, which helps the bill's chances for passage.

S. 795 would amend the Internal Revenue Code, with respect to the tax treatment of publicly traded partnerships as corporations, to expand the definition of "qualifying income" for such partnerships to include income and gains from renewable and alternative fuels and energy derived from renewable fuels and chemicals, as well as other types of alternative energy. Master Limited Partnerships (MLP) has been used by the fossil fuels industry since the 1980s as a successful way to attract capital and the renewable energy industry hopes to do the same. Representative Ted Poe (R-TX) has introduced a companion bill, H.R. 1696, in the House of Representatives.