II 

115TH CONGRESS 

1ST SESSION S. 1464 

To amend the Internal Revenue Code of 1986 to expand the exclusion for 

energy conservation subsidies provided by public utilities to include subsidies provided by public utilities and State and local governments for 

water conservation and storm water management. 

IN THE SENATE OF THE UNITED STATES 

JUNE 28, 2017 

Mrs. FEINSTEIN (for herself, Mr. HELLER, Mr. BENNET, and Mr. GARDNER) 

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 expand 

the exclusion for energy conservation subsidies provided 

by public utilities to include subsidies provided by public 

utilities and State and local governments for water conservation and storm water management. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Water Conservation 

5 Tax Parity Act’’. 


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•S 1464 IS

1 SEC. 2. MODIFICATIONS TO INCOME EXCLUSION FOR CON2 SERVATION SUBSIDIES. 

3 (a) IN GENERAL.—Subsection (a) of section 136 of 

4 the Internal Revenue Code of 1986 is amended— 

5 (1) by striking ‘‘any subsidy provided’’ and in6 serting ‘‘any subsidy— 

7 ‘‘(1) provided’’; 

8 (2) by striking the period at the end and insert9 ing a comma; and 

10 (3) by adding at the end the following new 

11 paragraphs: 

12 ‘‘(2) provided (directly or indirectly) by a public 

13 utility to a customer, or by a State or local govern14 ment to a resident of such State or locality, for the 

15 purchase or installation of any water conservation 

16 measure, or 

17 ‘‘(3) provided (directly or indirectly) by a storm 

18 water management provider to a customer, or by a 

19 State or local government to a resident of such State 

20 or locality, for the purchase or installation of any 

21 storm water management measure.’’. 

22 (b) CONFORMING AMENDMENTS.— 

23 (1) DEFINITION OF WATER CONSERVATION

24 MEASURE AND STORM WATER MANAGEMENT MEAS25 URE.—Section 136(c) of the Internal Revenue Code 

26 of 1986 is amended— 


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•S 1464 IS

1 (A) by striking ‘‘ENERGY CONSERVATION

2 MEASURE’’ in the heading thereof and inserting 

3 ‘‘DEFINITIONS’’; 

4 (B) by striking ‘‘IN GENERAL’’ in the 

5 heading of paragraph (1) and inserting ‘‘EN6 ERGY CONSERVATION MEASURE’’; and 

7 (C) by redesignating paragraph (2) as 

8 paragraph (4) and by inserting after paragraph 

9 (1) the following: 

10 ‘‘(2) WATER CONSERVATION MEASURE.—For 

11 purposes of this section, the term ‘water conserva12 tion measure’ means any installation or modification 

13 primarily designed to reduce consumption of water 

14 or to improve the management of water demand 

15 with respect to a dwelling unit. 

16 ‘‘(3) STORM WATER MANAGEMENT MEASURE.— 

17 For purposes of this section, the term ‘storm water 

18 management measure’ means any installation or 

19 modification of property primarily designed to re20 duce or manage amounts of storm water with re21 spect to a dwelling unit.’’. 

22 (2) DEFINITION OF PUBLIC UTILITY.—Section 

23 136(c)(4) of such Code (as redesignated by para24 graph (1)(C)) is amended by striking subparagraph 

25 (B) and inserting the following: 


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•S 1464 IS

1 ‘‘(B) PUBLIC UTILITY.—The term ‘public 

2 utility’ means a person engaged in the sale of 

3 electricity, natural gas, or water to residential, 

4 commercial, or industrial customers for use by 

5 such customers. 

6 ‘‘(C) STORM WATER MANAGEMENT PRO7 VIDER.—The term ‘storm water management 

8 provider’ means a person engaged in the provi9 sion of storm water management measures to 

10 the public. 

11 ‘‘(D) PERSON.—For purposes of subpara12 graphs (B) and (C), the term ‘person’ includes 

13 the Federal Government, a State or local gov14 ernment or any political subdivision thereof, or 

15 any instrumentality of any of the foregoing.’’. 

16 (3) CLERICAL AMENDMENTS.— 

17 (A) The heading of section 136 of such 

18 Code is amended— 

19 (i) by inserting ‘‘AND WATER’’ after 

20 ‘‘ENERGY’’; and 

21 (ii) by striking ‘‘PROVIDED BY PUB22 LIC UTILITIES’’. 

23 (B) The item relating to section 136 in the 

24 table of sections of part III of subchapter B of 

25 chapter 1 of such Code is amended— 


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•S 1464 IS

1 (i) by inserting ‘‘and water’’ after 

2 ‘‘energy’’; and 

3 (ii) by striking ‘‘provided by public 

4 utilities’’. 

5 (c) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to amounts received after January 

7 1, 2015. 

8 (d) NO INFERENCE.—Nothing in this Act or the 

9 amendments made by this Act shall be construed to create 

10 any inference with respect to the proper tax treatment of 

11 any subsidy received directly or indirectly from a public 

12 utility, a storm water management provider, or a State 

13 or local government for any water conservation measure 

14 or storm water management measure before January 1, 

15 2015. 

Æ 


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