I
119THCONGRESS
1
STSESSION H. R. 1871
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 waste-
water management measures.
IN THE HOUSE OF REPRESENTATIVES
MARCH5, 2025
Mr. H
UFFMAN(for himself, Mr. MOOREof Utah, and Ms. CHU) introduced
the following bill; which was referred to the Committee on Ways and Means
A BILL
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 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 ‘‘Water Conservation 4
Rebate Tax Parity Act’’. 5
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SEC. 2. MODIFICATIONS TO INCOME EXCLUSION FOR CON-1
SERVATION SUBSIDIES. 2
(a) I
NGENERAL.—Subsection (a) of section 136 of 3
the Internal Revenue Code of 1986 is amended— 4
(1) by striking ‘‘any subsidy provided’’ and in-5
serting ‘‘any subsidy— 6
‘‘(1) provided’’, 7
(2) by striking the period at the end and insert-8
ing a comma, and 9
(3) by adding at the end the following new 10
paragraphs: 11
‘‘(2) provided (directly or indirectly) by a public 12
utility to a customer, or by a State or local govern-13
ment to a resident of such State or locality, for the 14
purchase or installation of any water conservation or 15
efficiency measure, 16
‘‘(3) provided (directly or indirectly) by a storm 17
water management provider to a customer, or by a 18
State or local government to a resident of such State 19
or locality, for the purchase or installation of any 20
storm water management measure, or 21
‘‘(4) provided (directly or indirectly) by a State 22
or local government to a resident of such State or 23
locality for the purchase or installation of any waste-24
water management measure, but only if such meas-25
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ure is with respect to the taxpayer’s principal resi-1
dence.’’. 2
(b) C
ONFORMINGAMENDMENTS.— 3
(1) D
EFINITION OF WATER CONSERVATION OR 4
EFFICIENCY MEASURE AND STORM WATER MANAGE -5
MENT MEASURE .—Section 136(c) of the Internal 6
Revenue Code of 1986 is amended— 7
(A) by striking ‘‘E
NERGYCONSERVATION 8
M
EASURE’’ in the heading thereof and inserting 9
‘‘D
EFINITIONS’’, 10
(B) by striking ‘‘I
N GENERAL’’ in the 11
heading of paragraph (1) and inserting ‘‘E
N-12
ERGY CONSERVATION MEASURE ’’, and 13
(C) by redesignating paragraph (2) as 14
paragraph (5) and by inserting after paragraph 15
(1) the following: 16
‘‘(2) W
ATER CONSERVATION OR EFFICIENCY 17
MEASURE.—For purposes of this section, the term 18
‘water conservation or efficiency measure’ means any 19
evaluation of water use, or any installation or modi-20
fication of property, the primary purpose of which is 21
to reduce consumption of water or to improve the 22
management of water demand with respect to one or 23
more dwelling units. 24
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‘‘(3) STORM WATER MANAGEMENT MEASURE .— 1
For purposes of this section, the term ‘storm water 2
management measure’ means any installation or 3
modification of property primarily designed to re-4
duce or manage amounts of storm water with re-5
spect to one or more dwelling units, including an in-6
stallation or modification to prevent or reduce the 7
impacts of storm water-caused flooding to such 8
property. 9
‘‘(4) W
ASTEWATER MANAGEMENT MEASURE .— 10
For purposes of this section, the term ‘wastewater 11
management measure’ means any installation or 12
modification of property primarily designed to man-13
age wastewater (including septic tanks and cess-14
pools) with respect to one or more dwelling units.’’. 15
(2) D
EFINITION OF PUBLIC UTILITY .—Section 16
136(c)(5) of such Code (as redesignated by para-17
graph (1)(C)) is amended by striking subparagraph 18
(B) and inserting the following: 19
‘‘(B) P
UBLIC UTILITY.—The term ‘public 20
utility’ means a person engaged in the sale of 21
electricity, natural gas, or water to residential, 22
commercial, or industrial customers for use by 23
such customers. 24
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‘‘(C) STORM WATER MANAGEMENT PRO -1
VIDER.—The term ‘storm water management 2
provider’ means a person engaged in the provi-3
sion of storm water management measures to 4
the public. 5
‘‘(D) P
ERSON.—For purposes of subpara-6
graphs (B) and (C), the term ‘person’ includes 7
the Federal Government, a State or local gov-8
ernment or any political subdivision thereof, or 9
any instrumentality of any of the foregoing.’’. 10
(3) C
LERICAL AMENDMENTS .— 11
(A) The heading of section 136 of such 12
Code is amended— 13
(i) by inserting ‘‘
AND WATER ’’ after 14
‘‘
ENERGY’’, and 15
(ii) by striking ‘‘
PROVIDED BY PUB -16
LIC UTILITIES’’. 17
(B) The item relating to section 136 in the 18
table of sections of part III of subchapter B of 19
chapter 1 of such Code is amended— 20
(i) by inserting ‘‘and water’’ after 21
‘‘energy’’, and 22
(ii) by striking ‘‘provided by public 23
utilities’’. 24
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(c) EFFECTIVEDATE.—The amendments made by 1
this section shall apply to amounts received after Decem-2
ber 31, 2021. 3
(d) N
OINFERENCE.—Nothing in this Act or the 4
amendments made by this Act shall be construed to create 5
any inference with respect to the proper tax treatment of 6
any subsidy received directly or indirectly from a public 7
utility, a storm water management provider, or a State 8
or local government for any water conservation or effi-9
ciency measure, storm water management measure, or 10
wastewaster management measure before January 1, 11
2022. 12
Æ
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