S. 510: Financing Our Energy Future Act

Financing Our Energy Future Act

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.