2 bipartisan sponsors sign onto Senate MLP bill
Sens. Mary Landrieu (D-La.) and Susan Collins (R-Maine) are the latest to back the “Master Limited Partnership Parity Act,” S. 795, which would extend the ability to establish MLPs to clean energy firms. MLPs allow companies to establish partnerships whose shares are traded similarly to traditional stock but that are not taxed at the corporate level; the structure is popular in the oil and gas industry.
Sen. Chris Coons (D-Del.) introduced the MLP bill back in the spring, resuming a push he began in the previous session of Congress that has taken on new weight amid intensifying debate over comprehensive tax reform (Greenwire, April 24).
“Creating jobs and boosting America’s domestic energy resources are goals shared by both Democrats and Republicans,” Coons said in a statement yesterday. “Too many job-creating renewable-energy projects fail because they can’t secure the critical early-stage private capital they need. This common-sense legislation can make a real difference for the country, and I’m proud that Senators Landrieu and Collins have joined our diverse and strategic team of cosponsors.”
Two sources tracking the legislation said additional Democratic and Republican Senate co-sponsors are being unveiled in tandem to maintain the bipartisan nature of the bill. Landrieu and Collins join Sens. Jerry Moran (R-Kan.), Lisa Murkowski (R-Alaska) and Debbie Stabenow (D-Mich.) as co-sponsors.
A companion House bill, H.R. 1696, from Rep. Ted Poe (R-Texas) recently picked up Nevada Republican Rep. Mark Amodei as a co-sponsor but has struggled to gain additional GOP support because of the preponderance of Democrats who were early co-sponsors. Of the 27 House members who have lent their names to the bill, New York Rep. Chris Gibson is the only other Republican co-sponsor.
In addition to bipartisan backing, the proposal has won support from conservative groups and the American Petroleum Institute, among others. Observers see the oil industry’s support for expanding MLPs to all energy sources as a defense against those who would want to eliminate existing firms’ ability to use the favorable tax structure.
The issue also is tied up in the politics around the production tax credit (PTC), which aids many of the same wind and other renewable energy companies that would benefit from the MLP parity bill. The PTC expires at the end of this year, although expanded eligibility enacted in January means companies will still be able to benefit as long as they have started work on their projects by then.
There is growing pressure on Capitol Hill to end the credit, which has been frequently renewed since its initial enactment in 1992, but the wind industry in particular has been asking for at least several more years of support and is largely seen as loath to trade an expansion of MLPs for an end to the PTC. That tension will likely remain through a possible tax reform debate or in the context of a narrower tax extenders package that could see life if tax reform falters before the end of next year.