March 5, 2025
Mr. Curtis (for himself, Mr. Padilla, and Mr. Hickenlooper) introduced the following bill; which was read twice and referred to the Committee on Finance
To amend the Internal Revenue Code of 1986 to expand the exclusion for certain conservation subsidies to include subsidies for water conservation or efficiency measures, storm water management measures, and wastewater management measures.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
Section 1. Short title
This Act may be cited as the Water Conservation Rebate Tax Parity Act
.
Sec. 2. Modifications to income exclusion for conservation subsidies
(a) In general
Subsection (a) of section 136 of the Internal Revenue Code of 1986 is amended—
(1)
by striking any subsidy provided
and inserting
any subsidy—
(1)
provided,
(2)
by striking the period at the end and inserting a comma, and
(3)
by adding at the end the following new paragraphs:
(2)
provided (directly or indirectly) by a public utility to a customer, or by a State or local government to a resident of such State or locality, for the purchase or installation of any water conservation or efficiency measure,
(3)
provided (directly or indirectly) by a storm water management provider to a customer, or by a State or local government to a resident of such State or locality, for the purchase or installation of any storm water management measure, or
(4)
provided (directly or indirectly) by a State or local government to a resident of such State or locality for the purchase or installation of any wastewater management measure, but only if such measure is with respect to the taxpayer’s principal residence.
(b) Conforming amendments
(1) Definition of water conservation or efficiency measure and storm water management measure
Section 136(c) of the Internal Revenue Code of 1986 is amended—
(A)
by striking Energy conservation measure
in the heading thereof and inserting Definitions
,
(B)
by striking In general
in the heading of paragraph (1) and inserting Energy conservation measure
, and
(C)
by redesignating paragraph (2) as paragraph (5) and by inserting after paragraph (1) the following:
(2) Water conservation or efficiency measure
For purposes of this section, the term water conservation or efficiency measure means any evaluation of water use, or any installation or modification of property, the primary purpose of which is to reduce consumption of water or to improve the management of water demand with respect to one or more dwelling units.
(3) Storm water management measure
For purposes of this section, the term storm water management measure means any installation or modification of property primarily designed to reduce or manage amounts of storm water with respect to one or more dwelling units, including an installation or modification to prevent or reduce the impacts of storm water-caused flooding to such property.
(4) Wastewater management measure
For purposes of this section, the term wastewater management measure means any installation or modification of property primarily designed to manage wastewater (including septic tanks and cesspools) with respect to one or more dwelling units.
(2) Definition of public utility
Section 136(c)(5) of such Code (as redesignated by paragraph (1)(C)) is amended by striking subparagraph (B) and inserting the following:
(B) Public utility
The term public utility means a person engaged in the sale of electricity, natural gas, or water to residential, commercial, or industrial customers for use by such customers.
(C) Storm water management provider
The term storm water management provider means a person engaged in the provision of storm water management measures to the public.
(D) Person
For purposes of subparagraphs (B) and (C), the term person includes the Federal Government, a State or local government or any political subdivision thereof, or any instrumentality of any of the foregoing.
(3) Clerical amendments
(A)
The heading of section 136 of such Code is amended—
(i)
by inserting and water
after Energy
, and
(ii)
by striking provided by public utilities
.
(B)
The item relating to section 136 in the table of sections of part III of subchapter B of chapter 1 of such Code is amended—
(i)
by inserting and water
after Energy
, and
(ii)
by striking provided by public utilities
.
(c) Effective date
The amendments made by this section shall apply to amounts received after December 31, 2021.
(d) No inference
Nothing in this Act or the amendments made by this Act shall be construed to create any inference with respect to the proper tax treatment of any subsidy received directly or indirectly from a public utility, a storm water management provider, or a State or local government for any water conservation or efficiency measure, storm water management measure, or wastewater management measure before January 1, 2022.