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103D CONGRESS

1ST SESSION H. R. 784

To amend the Internal Revenue Code of 1986 to clarify that conservation

expenditures by electric and gas utilities are deductible for the year

in which paid or incurred.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 3, 1993

Mr. MCDERMOTT (for himself, Mr. KOPETSKI, Mr. NEAL of Massachusetts,

Mr. HOUGHTON, Mr. HALL of Texas, and Mrs. JOHNSON of Connecticut)

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 clarify

that conservation expenditures by electric and gas utilities are deductible for the year in which paid or incurred.

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 ‘‘Energy Efficiency and

5 Conservation Act of 1993’’.
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1 SEC. 2. ENERGY CONSERVATION EXPENDITURES BY ELEC2 TRIC AND GAS UTILITIES.

3 (a) IN GENERAL.—Part VI of subchapter B of chap4 ter 1 of the Internal Revenue Code of 1986 (relating to

5 itemized deductions for individuals and corporations) is

6 amended by inserting after section 196 the following new

7 section:

8 ‘‘SEC. 197. ENERGY CONSERVATION EXPENDITURES BY

9 ELECTRIC AND GAS UTILITIES.

10 ‘‘(a) GENERAL RULE.—In the case of an electric or

11 gas utility, there shall be allowed as a deduction for the

12 taxable year an amount equal to the energy conservation

13 expenditures paid or incurred by the taxpayer during such

14 taxable year.

15 ‘‘(b) ENERGY CONSERVATION EXPENDITURES.—For

16 purposes of this section, the term ‘energy conservation ex17 penditures’ means expenditures for—

18 ‘‘(1) subsidies provided directly or indirectly to

19 customers for the purchase, installation, or modifica20 tion of—

21 ‘‘(A) any device or service primarily de22 signed to reduce consumption of electricity, nat23 ural gas, or steam or to improve the manage24 ment of energy demand, or

25 ‘‘(B) any specially defined energy property

26 (as defined in section 136(c)(2)(A)),
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1 ‘‘(2) energy use consulting and audits of com2 mercial, residential, and industrial properties, or

3 ‘‘(3) administrative, promotional, and other

4 costs associated with expenditures described in para5 graph (1) or (2).

6 Such term shall not include any expenditure taken into

7 account in determining the basis of any tangible property

8 which is owned by the taxpayer and which is of a character

9 subject to the allowance for depreciation.

10 ‘‘(c) ELECTRIC OR GAS UTILITY.—For purposes of

11 this section, the term ‘electric or gas utility’ means any

12 corporation engaged in the furnishing or sale of electric

13 energy, natural gas, or steam if the rates for such furnish14 ing or sale have been established or approved by a State

15 or political subdivision thereof, by any agency or instru16 mentality of the United States, or by a public utility or

17 public service commission or other similar body of any

18 State or political subdivision thereof or of the District of

19 Columbia.’’

20 (b) CONFORMING AMENDMENTS.—

21 (1) Paragraph (1) of section 263(a) of such

22 Code is amended by striking ‘‘; or’’ at the end of

23 subparagraph (F) and inserting a comma, by strik24 ing the period at the end of subparagraph (G) and
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1 inserting ‘‘, or’’, and by adding at the end thereof

2 the following new subparagraph:

3 ‘‘(H) expenditures for which a deduction is

4 allowed under section 197.’’

5 (2) The table of sections for part VI of sub6 chapter B of chapter 1 of such Code is amended by

7 adding at the end thereof the following new item:

‘‘Sec. 197. Energy conservation expenditures by electric and gas

utilities.’’

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

9 this section shall apply to expenditures paid or incurred

10 in taxable years beginning after December 31, 1980.

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