Sponsors (12)
Expands the list of energy- and low-carbon-related activities that count as "qualifying income" for publicly traded partnerships, adding many clean-energy, fuel, carbon-capture, and biobased-chemical activities.
Official title: 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.
Introduced February 11, 2025 by Jerry Moran · Last progress February 11, 2025
The bill mobilizes private capital through PTPs to accelerate investment in clean energy, storage, and low‑carbon fuels—potentially cutting project costs and improving grid resilience—but does so at the risk of reduced federal revenue, added regulatory complexity, certification costs for some manufacturers, and the possibility of extending certain fossil/transitional infrastructure investments.
Project developers, utilities, and investors can treat revenues from clean energy, low‑carbon fuels, storage, and advanced nuclear as qualifying income for publicly traded partnerships (PTPs), making PTPs a more viable financing route and lowering capital costs for new clean‑energy projects.
Producers of low‑carbon and sequestration‑based fuels that meet the ≥60% lifecycle GHG reduction threshold gain market and financing incentives, encouraging production and use of lower‑emitting fuels.
Utilities and grid operators can attract investment in energy storage, combined heat and power, and certain biomass/MSW processing, improving grid reliability, flexibility, and resilience—particularly benefiting rural communities.
Taxpayers could face higher federal deficits or a shifted tax burden because expanding qualifying income for PTPs will reduce federal tax receipts.
Including certain fossil‑related transport/storage and fuels derived from captured carbon (and liquified/compressed hydrogen) risks prolonging investments in fossil or transitional fuel infrastructure, which could harm long‑term emissions goals and communities reliant on a clean transition.
The new 60% lifecycle GHG determinations and required cross‑agency consultations create regulatory complexity that could generate uncertainty and delay financing and project timelines for utilities, developers, and small businesses.
Based on analysis of 2 sections of legislative text.
Amends the tax code to expand which business activities count as "qualifying income" for publicly traded partnerships (PTPs), adding a wide range of clean-energy, low-carbon, and advanced-fuel activities. The change makes income from generation, storage, transport, conversion, and production tied to renewable energy, low-carbon fuels, carbon-capture-derived fuels, advanced nuclear, biobased chemicals, and related projects eligible as passive-type income for PTP tax treatment for taxable years beginning after December 31, 2025. The amendment also updates cross-references to several energy and tax credit provisions (including rules tied to energy production and carbon capture tax credits) and sets technical thresholds (for lifecycle greenhouse gas reductions, carbon-oxide qualification percentages, and biobased labeling and use restrictions) that Treasury will apply after consultation with DOE and EPA.