Dear Algae Biomass Organization member,
Please contact your Senators today to ask them to cosponsor the Master Limited Partnership Parity Act, which would allow clean energy projects to qualify as Master Limited Partnerships. The sponsor of this important bill is trying to get it considered as an amendment to the Comprehensive Tax Bill.
The Master Limited Partnership Parity Act would have a game changing effect on how algae projects are financed. The legislation would allow algae companies to organize as Master Limited Partnerships (MLPs), which are operated and taxed as partnerships but can be publicly traded and offer investors liquidity, limited liability and dividends.
This change would incentivize investments we need to provide the world with the renewable fuels, fertilizers, chemicals, medicines, carbon sequestration, wastewater treatment, plastics, and the many other innovations algae can provide.
On Tuesday, May 14, 2014, Senator Chris Coons (D-DE) and other bipartisan cosponsors filed the MLP Parity Act (S. 795) as an amendment to the tax extenders bill which the Senate is considering now. At this time, we are not certain about the ability to take up amendments to the underlying bill or if there will be a unanimous consent agreement for a finite amendment list.
With that understanding, Senator Coons and the other cosponsors have asked that supporters reach out to other Senate offices in support of the Coons/Moran/Stabenow/Murkowski amendment (#3081). Even though we are unsure about the possibility of amending the tax extenders bill with the MLP Parity Act, Coons’ office believes that this is a great opportunity to raise awareness and inform other offices about the MLP Parity Act, at a minimum. Also, raising awareness will inevitably increase the chance that the MLP Parity Act will be considered if other legislative opportunities present themselves.
Please contact your Senators and ask them to cosponsor the Coons/Moran/Stabenow/Murkowski Amendment (#3081) to the Wyden Tax Extenders Bill.
Senate contact information can be found here: http://www.senate.gov/pagelayout/general/one_item_and_teasers/contacting.htm
How master limited partnerships work
An MLP is a business structure that is taxed as a partnership, but whose ownership interests are traded like corporate stock on a market. Whereas profit from publicly traded C corporations is taxed at both the corporate level and the shareholder level, income from MLPs is taxed only at the shareholder level because it is treated as a partnership for tax purposes.
An MLP must generate at least 90 percent of its income from qualified sources, such as real estate or natural resources, including crude oil, natural gas, petroleum products, coal, timber, and other minerals. Section 613 of the federal tax code specifically requires qualifying energy sources to be “depletable” resources – meaning we are working against our own goal of an “all of the above” energy strategy that includes additional homegrown renewable energy sources.
How the MLP Parity Act helps
The MLP Parity Act simply expands the definition of “qualified” sources to include clean energy resources and infrastructure projects. Specifically included are those energy technologies that qualify 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 legislation also allows for a range of transportation fuels to qualify, including cellulosic, ethanol, biodiesel, and algae-based fuels, as well as energy-efficient buildings, electricity storage, carbon capture and storage, renewable chemicals, and waste-heat-to-power technologies.
The MLP Parity Act does not affect any current MLP entity. All projects currently eligible to structure as MLPs would continue to qualify exactly as they would under existing law.
Coons (D-DE) – Sponsor
If you have questions about about this legislation please contact the ABO’s legislative counsel, Laurie Purpuro, at email@example.com.