This bill allows a publicly traded partnership to derive income from certain clean energy-related activities and still be treated as a partnership for federal income tax purposes.
As background, a publicly traded partnership is a partnership whose interests are traded on an established securities market (or readily tradable on a secondary market). A publicly traded partnership generally is treated as a corporation for federal income tax purposes unless 90% or more of such partnership’s gross income is qualifying income.
Under current law, qualifying income includes
interest and dividends;
real property rents;
gain from the sale (or disposition) of real property;
income from certain activities related to minerals and natural resources, source carbon dioxide, and the transportation or storage of certain fuels; and
gain from the sale (or disposition) of a capital asset or commodities.
Under the bill, the qualifying income is expanded to include income derived from
electric power (or thermal energy) generated from renewable energy sources (e.g., wind and solar energy), qualified gasification projects, or advanced nuclear facilities;
accepting or processing open-loop biomass or municipal solid waste (by certain facilities);
the storage of electric power or thermal energy using certain energy storage technology;
the generation, storage, or distribution of electric power (or thermal energy) using combined heat and power system property;
fuels that use certain carbon oxides as primary feedstock;
certain renewable chemicals;
transportation or storage of liquefied or compressed hydrogen;
the conversion of renewable biomass; and
certain carbon capture and sequestration facilities.
