Financing Our Energy Future Act

II 116TH CONGRESS 1ST SESSION S. 1841 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. IN THE SENATE OF THE UNITED STATES JUNE 13, 2019 Mr. COONS (for himself, Mr. MORAN, Mr. KING, Ms. COLLINS, Mr. CARPER, Ms. MURKOWSKI, Mr. HEINRICH, Ms. ERNST, Mr. GARDNER, Ms. STA- BENOW, Mr. CRAPO, and Mr. BENNET) introduced the following bill; which was read twice and referred to the Committee on Finance 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 Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Financing Our Energy 4 Future Act’’. 5 VerDate Sep 11 2014 02:11 Jun 19, 2019 Jkt 034408 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1841.IS S1841 pbinns on DSK79D2C42PROD with BILLS 2 •S 1841 IS SEC. 2. EXTENSION OF PUBLICLY TRADED PARTNERSHIP 1 OWNERSHIP STRUCTURE TO ENERGY POWER 2 GENERATION PROJECTS, TRANSPORTATION 3 FUELS, AND RELATED ENERGY ACTIVITIES. 4 (a) IN GENERAL.—Subparagraph (E) of section 5 7704(d)(1) of the Internal Revenue Code of 1986 is 6 amended— 7 (1) by striking ‘‘income and gains derived from 8 the exploration’’ and inserting ‘‘income and gains 9 derived from the following: 10 ‘‘(i) MINERALS, NATURAL RE- 11 SOURCES, ETC.—The exploration’’; 12 (2) by inserting ‘‘or’’ before ‘‘industrial 13 source’’; 14 (3) by inserting a period after ‘‘carbon diox- 15 ide’’; and 16 (4) by striking ‘‘, or the transportation or stor- 17 age’’ and all that follows and inserting the following: 18 ‘‘(ii) RENEWABLE ENERGY.—The gen- 19 eration of electric power (including the 20 leasing of tangible personal property used 21 for such generation) exclusively utilizing 22 any resource described in section 45(c)(1) 23 or energy property described in section 48 24 (determined without regard to any termi- 25 nation date), or in the case of a facility de- 26 VerDate Sep 11 2014 02:11 Jun 19, 2019 Jkt 034408 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1841.IS S1841 pbinns on DSK79D2C42PROD with BILLS 3 •S 1841 IS scribed in paragraph (3) or (7) of section 1 45(d) (determined without regard to any 2 placed in service date or date by which 3 construction of the facility is required to 4 begin), the accepting or processing of such 5 resource. 6 ‘‘(iii) ENERGY STORAGE PROPERTY.— 7 The sale of electric power, capacity, re- 8 source adequacy, demand response capa- 9 bilities, or ancillary services that is pro- 10 duced or made available from any equip- 11 ment or facility (operating as a single unit 12 or as an aggregation of units) the principal 13 function of which is to— 14 ‘‘(I) use mechanical, chemical, 15 electrochemical, hydroelectric, or ther- 16 mal processes to store energy that was 17 generated at one time for conversion 18 to electricity at a later time, or 19 ‘‘(II) store thermal energy for di- 20 rect use for heating or cooling at a 21 later time in a manner that avoids the 22 need to use electricity at that later 23 time. 24 VerDate Sep 11 2014 02:11 Jun 19, 2019 Jkt 034408 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1841.IS S1841 pbinns on DSK79D2C42PROD with BILLS 4 •S 1841 IS ‘‘(iv) COMBINED HEAT AND POWER.— 1 The generation, storage, or distribution of 2 thermal energy exclusively utilizing prop- 3 erty described in section 48(c)(3) (deter- 4 mined without regard to subparagraphs 5 (B) and (D) thereof and without regard to 6 any placed in service date). 7 ‘‘(v) RENEWABLE THERMAL EN- 8 ERGY.—The generation, storage, or dis- 9 tribution of thermal energy exclusively 10 using any resource described in section 11 45(c)(1) or energy property described in 12 clause (i) or (iii) of section 48(a)(3)(A). 13 ‘‘(vi) WASTE HEAT TO POWER.—The 14 use of recoverable waste energy, as defined 15 in section 371(5) of the Energy Policy and 16 Conservation Act (42 U.S.C. 6341(5)) (as 17 in effect on the date of the enactment of 18 the Financing Our Energy Future Act). 19 ‘‘(vii) RENEWABLE FUEL INFRA- 20 STRUCTURE.—The storage or transpor- 21 tation of any fuel described in subsection 22 (b), (c), (d), or (e) of section 6426. 23 ‘‘(viii) RENEWABLE FUELS.—The pro- 24 duction, storage, or transportation of any 25 VerDate Sep 11 2014 02:11 Jun 19, 2019 Jkt 034408 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1841.IS S1841 pbinns on DSK79D2C42PROD with BILLS 5 •S 1841 IS renewable fuel described in section 1 211(o)(1)(J) of the Clean Air Act (42 2 U.S.C. 7545(o)(1)(J)) (as in effect on the 3 date of the enactment of the Financing 4 Our Energy Future Act) or section 5 40A(d)(1). 6 ‘‘(ix) FUEL DERIVED FROM CAP- 7 TURED CARBON OXIDES.—The production, 8 storage, or transportation of any fuel 9 which— 10 ‘‘(I) uses carbon oxides captured 11 from an anthropogenic source or the 12 atmosphere as its primary feedstock, 13 and 14 ‘‘(II) is determined by the Sec- 15 retary, in consultation with the Sec- 16 retary of Energy and the Adminis- 17 trator of the Environmental Protec- 18 tion Agency, to achieve a reduction of 19 not less than a 60 percent in lifecycle 20 greenhouse gas emissions (as defined 21 in section 211(o)(1)(H) of the Clean 22 Air Act) compared to baseline lifecycle 23 greenhouse gas emissions (as defined 24 in section 211(o)(1)(C) of such Act). 25 VerDate Sep 11 2014 02:11 Jun 19, 2019 Jkt 034408 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1841.IS S1841 pbinns on DSK79D2C42PROD with BILLS 6 •S 1841 IS This clause shall not apply to any fuel 1 which uses as its primary feedstock carbon 2 oxide which is deliberately released from 3 naturally-occurring subsurface springs. 4 ‘‘(x) RENEWABLE CHEMICALS.—The 5 production, storage, or transportation of 6 any qualifying renewable chemical (as de- 7 fined in paragraph (6)). 8 ‘‘(xi) ENERGY EFFICIENT BUILD- 9 INGS.—The audit and installation through 10 contract or other agreement of any energy 11 efficient building property described in sec- 12 tion 179D(c)(1). 13 ‘‘(xii) GASIFICATION WITH SEQUES- 14 TRATION.—The production of any product 15 or the generation of electric power from a 16 project— 17 ‘‘(I) which meets the require- 18 ments of subparagraphs (A) and (B) 19 of section 48B(c)(1), and 20 ‘‘(II) not less than 75 percent of 21 the total carbon oxide emissions of 22 which is qualified carbon oxide (as de- 23 fined in section 45Q(c)) which is dis- 24 VerDate Sep 11 2014 02:11 Jun 19, 2019 Jkt 034408 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1841.IS S1841 pbinns on DSK79D2C42PROD with BILLS 7 •S 1841 IS posed of or utilized as provided in 1 paragraph (7). 2 ‘‘(xiii) CARBON CAPTURE AND SE- 3 QUESTRATION.— 4 ‘‘(I) POWER GENERATION FACILI- 5 TIES.—The generation or storage of 6 electric power (including associated 7 income from the sale or marketing of 8 energy, capacity, resource adequacy, 9 and ancillary services) produced from 10 any power generation facility which is, 11 or from any power generation unit 12 within, a qualified facility which is de- 13 scribed in section 45Q(d) and not less 14 than 50 percent (30 percent in the 15 case of a facility or unit placed in 16 service before January 1, 2019) of the 17 total carbon oxide emissions of which 18 is qualified carbon oxide which is dis- 19 posed of or utilized as provided in 20 paragraph (7). 21 ‘‘(II) OTHER FACILITIES.—The 22 sale of any good or service from any 23 facility (other than a power generation 24 facility) which is a qualified facility 25 VerDate Sep 11 2014 02:11 Jun 19, 2019 Jkt 034408 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1841.IS S1841 pbinns on DSK79D2C42PROD with BILLS 8 •S 1841 IS described in section 45Q(d) and the 1 captured qualified carbon oxide (as so 2 defined) of which is disposed of as 3 provided in paragraph (7).’’. 4 (b) RENEWABLE CHEMICAL.— 5 (1) IN GENERAL.—Section 7704(d) of such 6 Code is amended by adding at the end the following 7 new paragraph: 8 ‘‘(6) QUALIFYING RENEWABLE CHEMICAL.— 9 ‘‘(A) IN GENERAL.—The term ‘qualifying 10 renewable chemical’ means any renewable chem- 11 ical (as defined in section 9001 of the Farm Se- 12 curity and Rural Investment Act of 2002 (7 13 U.S.C. 8101))— 14 ‘‘(i) which is produced by the taxpayer 15 in the United States or in a territory or 16 possession of the United States, 17 ‘‘(ii) which is the product of, or reli- 18 ant upon, biological conversion, thermal 19 conversion, or a combination of biological 20 and thermal conversion, of renewable bio- 21 mass (as defined in section 9001(13) of 22 the Farm Security and Rural Investment 23 Act of 2002), 24 VerDate Sep 11 2014 02:11 Jun 19, 2019 Jkt 034408 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1841.IS S1841 pbinns on DSK79D2C42PROD with BILLS 9 •S 1841 IS ‘‘(iii) the biobased content of which is 1 95 percent or higher, 2 ‘‘(iv) which is sold or used by the tax- 3 payer— 4 ‘‘(I) for the production of chem- 5 ical products, polymers, plastics, or 6 formulated products, or 7 ‘‘(II) as chemicals, polymers, 8 plastics, or formulated products, 9 ‘‘(v) which is not sold or used for the 10 production of any food, feed, or fuel, and 11 ‘‘(vi) which is— 12 ‘‘(I) acetic acid, acetone, acrylic 13 acid, acyl glutamate, adipic acid, algae 14 oils, algae sugars, 1,4-butanediol 15 (BDO), iso-butanol, n-butanol, C3-C9 16 aldehydes, C3-C9 ketones, C10 and 17 higher hydrocarbons produced from 18 olefin metathesis, carboxylic acids pro- 19 duced from olefin metathesis, cellu- 20 losic sugar, diethyl methylene malo- 21 nate, dodecanedioic acid (DDDA), 22 esters produced from olefin metath- 23 esis, ethyl acetate, ethylene glycol, 24 farnesene, 2,5-furandicarboxylic acid, 25 VerDate Sep 11 2014 02:11 Jun 19, 2019 Jkt 034408 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1841.IS S1841 pbinns on DSK79D2C42PROD with BILLS 10 •S 1841 IS gamma-butyrolactone, glucaric acid, 1 hexamethylenediamine (HMD), 3-hy- 2 droxy propionic acid, isoamylene, iso- 3 butene, isoprene, isopropanol, itaconic 4 acid, lactide, levulinic acid, modified 5 vegetable oils (oligomers or polymers) 6 as produced from olefin metathesis, 7 polyhydroxyalkonate (PHA), polylactic 8 acid (PLA), polyethylene furanoate 9 (PEF), polyethylene terephthalate 10 (PET), polyitaconic acid, polyols from 11 vegetable oils, poly(xylitan levulinate 12 ketal), 1,3-propanediol, 1,2- 13 propanediol, rhamnolipids, short and 14 medium chain carboxylic acids pro- 15 duced from anaerobic digestion, suc- 16 cinic acid, terephthalic acid, vegetable 17 fatty acid derived from ethyl esters 18 containing vegetable oil, or p-Xylene, 19 or 20 ‘‘(II) any chemical not described 21 in clause (i) which is a chemical listed 22 by the Secretary for purposes of this 23 paragraph. 24 VerDate Sep 11 2014 02:11 Jun 19, 2019 Jkt 034408 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1841.IS S1841 pbinns on DSK79D2C42PROD with BILLS 11 •S 1841 IS ‘‘(B) BIOBASED CONTENT.—For purposes 1 of subparagraph (A)(iii), the term ‘biobased 2 content percentage’ means, with respect to any 3 renewable chemical, the biobased content of 4 such chemical (expressed as a percentage) de- 5 termined by testing representative samples 6 using the American Society for Testing and 7 Materials (ASTM) D6866.’’. 8 (2) LIST OF OTHER QUALIFYING RENEWABLE 9 CHEMICALS.—Not later than 180 days after the date 10 of the enactment of this Act, the Secretary of the 11 Treasury (or the Secretary’s delegate), in consulta- 12 tion with the Secretary of Agriculture, shall establish 13 a program to consider applications from taxpayers 14 for the listing of chemicals under section 15 7704(d)(6)(A)(vi)(II) of the Internal Revenue Code 16 of 1986 (as added by paragraph (1)). 17 (c) DISPOSAL AND UTILIZATION OF CAPTURED CAR- 18 BON OXIDE.—Section 7704(d) of such Code, as amended 19 by subsection (b), is amended by adding at the end the 20 following new paragraph: 21 ‘‘(7) DISPOSAL AND UTILIZATION OF CAPTURED 22 CARBON OXIDE.—For purposes of clauses (xii)(III) 23 and (xiii)(I) of paragraph (1)(E), carbon oxide is 24 VerDate Sep 11 2014 02:11 Jun 19, 2019 Jkt 034408 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1841.IS S1841 pbinns on DSK79D2C42PROD with BILLS 12 •S 1841 IS disposed of or utilized as provided in this paragraph 1 if such carbon oxide is— 2 ‘‘(A) placed into secure geological storage 3 (as determined under section 45Q(f)(2)), 4 ‘‘(B) used as a tertiary injectant (as de- 5 fined in section 45Q(e)(3)) in a qualified en- 6 hanced oil or natural gas recovery project (as 7 defined in section 45Q(e)(2)) and placed into 8 secure geological storage (as so determined), or 9 ‘‘(C) utilized in a manner described in sec- 10 tion 45Q(f)(5).’’. 11 (d) EFFECTIVE DATE.—The amendments made by 12 this section shall take effect on the date of the enactment 13 of this Act, in taxable years ending after such date. 14 Æ VerDate Sep 11 2014 02:11 Jun 19, 2019 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