Sponsors (2)
The bill encourages investment in low‑emission energy by preserving partnership pass‑through tax treatment and clarifying qualifying activities for publicly traded partnerships, but does so at the cost of reduced corporate tax revenue, potential concentration of benefits among larger firms, added implementation complexity, and support for some environmentally contested technologies.
Investors and owners of publicly traded partnerships (taxpayers, financial institutions) can continue to treat qualifying green-energy project income as partnership income, preserving pass‑through tax treatment and avoiding corporate-level tax.
Utilities, energy companies, and investors will face stronger incentives to finance and build renewable energy, energy storage, carbon capture, advanced nuclear, and biobased-chemical projects because related income becomes tax-favorable for publicly traded partnerships.
Rural and urban communities could see reduced greenhouse gas emissions and local pollution over time as deployment of low‑emission technologies (storage, CHP, carbon capture, advanced nuclear) is supported.
All taxpayers may face higher federal deficits or shifted tax burdens because enabling more firms to retain partnership pass‑through status could reduce corporate tax revenue.
Small private developers and local firms could be disadvantaged while larger, finance‑ready energy firms and publicly traded vehicles capture more investment and tax benefits, concentrating gains among investors and institutions.
Urban and rural communities could experience negative local environmental or health impacts because the bill subsidizes a broad set of technologies (including advanced nuclear and certain biomass/waste uses) that have contested local effects.
Based on analysis of 2 sections of legislative text.
Broadens the types of green energy and low‑carbon activities whose income counts as qualifying income for publicly traded partnerships, preserving pass‑through tax status.
Introduced April 1, 2025 by Ron Estes · Last progress April 1, 2025
Expands the tax definition of “qualifying income” for publicly traded partnerships so that a wide set of green energy, low‑carbon, and renewable activities count as qualifying income and therefore can preserve pass‑through partnership tax treatment instead of being taxed as corporations. The change covers generation from renewable and advanced nuclear sources, energy storage and combined heat and power, processing/storage/transport of renewable fuels and hydrogen, carbon‑capture related activities that meet emissions tests, certain biobased chemicals, biomass and municipal solid waste processing, and related operations. The rule applies to taxable years beginning after December 31, 2025, and directs the Treasury Secretary to consult DOE and EPA on lifecycle greenhouse gas determinations and to rely on USDA certification for certain biobased chemicals. It creates new eligibility tests (for example, a 60% lifecycle GHG reduction threshold for carbon‑oxide‑derived fuels and ≥50% qualified carbon oxide content at some facilities) that firms must meet to qualify.