The creation of new master limited partnerships (MLP) continues apace, as four initial public offerings (IPO) that raised an aggregate USD1.229 billion were completed in the first quarter of 2013. That compares to seven deals worth USD1.787 billion during the fourth quarter of 2012.

The gist is sponsors are answering the continuing investor clamor for high-yield vehicles.

At the same time, however, an effort to expand the definition of “qualified sources” from which an MLP must generate the lion’s share of its income–and therefore expand the number of high-yield vehicles available to investors–has been stuck in Congressional mud.

This week Representative Peter Welch (D-VT) announced his intention to introduce in the House of Representatives the Master Limited Partnership Parity Act. If the title of Rep. Welch’s bill seems familiar it should: The same was introduced by Senator Christopher Coons (D-DE) in September 2012.

Sen. Coons’ bill was co-sponsored by Sen. Jerry Moran, a Republican from Kansas, as well as two other GOP senators and seven Democrats in the upper chamber.

The MLP Parity Act was also introduced in the House during the 112th Congress by Rep. Ted Poe (R-TX). Rep. Mike Thompson, a Democrat from California, and Rep. Welch co-sponsored the bill in the lower chamber last year.

Unfortunately, the bill was “referred to committee” in the House, where it “died” before either the lower or the upper chamber could put it to a full vote.

In our legislative system a committee isn’t required to act on bills referred to it; neither is a subcommittee. The committee chair decides where the bill goes next, if he or she feels it requires further action.

It therefore only takes one committee or subcommittee to trip up a bill’s progress, and it can happen without any visible activity. Inactivity, as much as a majority of “no” votes, is enough to kill a bill.

Under current law 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 as well as pipelines.

The MLP Parity Act would simply expand 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 Internal Revenue 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, biodiesel, and algae-based fuels.

In his press release announcing his intention to push the bill once more Rep. Welch noted the “bicameral” and “bipartisan” support for legislation that would provide for renewable energy projects the same access to lower-cost capital and improved liquidity available to “traditional” resource- and energy-focused projects.

In his “white paper” on the bill Sen. Coons describes the MLP Parity Act as “a straightforward, powerful tweak to the federal tax code that could unleash significant private capital into the energy market.”

It’s also brief, at less than 250 words long, including boilerplate. Here it is, beginning with the statement of purpose under the traditional introductory header “A Bill”:

To amend the Internal Revenue Code of 1986 to extend the publicly traded partnership ownership structure to energy power generation projects and transportation fuels, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Master Limited Partnerships Parity Act’.

SEC. 2. EXTENSION OF PUBLICLY TRADED PARTNERSHIP OWNERSHIP STRUCTURE TO ENERGY POWER GENERATION PROJECTS AND TRANSPORTATION FUELS.

(a) In General- Subparagraph (E) of section 7704(d)(1) of the Internal Revenue Code of 1986 is amended by striking ‘, industrial source carbon dioxide,’ and all that follows and inserting ‘or of any industrial source carbon dioxide; or the generation, storage, or transmission to the electrical grid of electric power exclusively utilizing any resource described in section 45(c)(1) or energy property described in section 48, or the accepting or processing of such resource or property for such utilization; or the generation or storage of thermal power exclusively utilizing any such resource or property; or the transportation or storage of any fuel described in subsection (b), (c), (d), or (e) of section 6426; or the production for sale by the taxpayer, the transportation, or the storage of any renewable fuel described in section 211(o)(1)(J) of the Clean Air Act (42 U.S.C. 7545(o)(1)(J)),’.

(b) Effective Date- The amendment made by this section shall take effect on the date of the enactment of this Act, in taxable years ending after such date.

In short, the MLP Parity Act would level the playing field between traditional and new energy businesses by helping energy-generation and transmission companies form master limited partnerships, which combine the funding advantages of corporations and the tax advantages of partnerships.

It seems a pretty simple step in an all-of-the-above energy strategy ostensibly favored by members of both political parties.

We’ve reached out to Rep. Welch’s office for his perspective on the likelihood of the MLP Parity Act making better progress in the 113th Congress than it did in the 112th. We had no response as of press time, but we’ll keep you posted on efforts to expand the field of efficient, energy-focused investments that generate above-average yields.