Details of Public Law 119-21, section 70524 , One Big Beautiful Bill Act

This provision modifies the definition of qualifying income for publicly traded partnerships to be exempt from treatment as a corporation under the IRC. The term “qualifying income” is modified to include income and gains derived from:

The transportation or storage of sustainable aviation fuel and liquified or compressed hydrogen,

The generation, availability for such generation, or storage of electric power, or the capture of carbon dioxide, at a qualified facility where not less than 50 percent of the total carbon oxide production is qualified carbon oxide production without regard to any required construction date,

The production of electricity from any advanced nuclear facility,

The production of electricity or thermal energy exclusively from geothermal or qualified hydropower production

The operation of energy property which includes equipment, used to produce, distribute, or use energy from a geothermal deposit, but only with respect to electricity generated by geothermal power up to the electrical transmission stage, or equipment which uses the ground or ground water as a thermal energy source to heat a structure or as a thermal energy sink to cool a structure, without regard to any required construction date.

Under the PITL, California law automatically conforms to the federal definition of “qualifying income” for determining whether a publicly traded partnerships is treated as a corporation. As a result, California conforms under the PITL to the changes made by this provision.

Under the CTL, California conforms with modifications to certain publicly traded partnerships treated as corporations as of the “specified date” of January 1, 2025. As a result, California does not conform under the CTL to the changes made by this provision.

The estimated revenue impact to conform to the above provisions would result in the following loss:

26/27 27/28 28/29 29/30 ($18,000,000) ($13,000,000) ($14,000,000) ($14,000,000)