I
104TH CONGRESS
1ST SESSION
H. R. 959
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 15, 1995
Mr. MCDERMOTT 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 utili-
ties are deductible for the year in which paid or incurred.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Energy Efficiency and
Conservation Act of 1995’’.
SEC. 2. ENERGY CONSERVATION EXPENDITURES BY ELEC-
TRIC AND GAS UTILITIES.
(a) IN GENERAL.—Part VI of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to
itemized deductions for individuals and corporations) is
amended by inserting after section 197 the following new
section:
‘‘SEC. 198. ENERGY CONSERVATION EXPENDITURES BY
ELECTRIC AND GAS UTILITIES.
‘‘(a) GENERAL RULE.—In the case of an electric or
gas utility, there shall be allowed as a deduction for the
taxable year an amount equal to the energy conservation
expenditures paid or incurred by the taxpayer during such
taxable year.
‘‘(b) ENERGY CONSERVATION EXPENDITURES.—For
purposes of this section, the term ‘energy conservation ex-
penditures’ means expenditures for—
‘‘(1) subsidies provided directly or indirectly to
customers for the purchase, installation, or modifica-
tion of—
‘‘(A) any device or service primarily de-
signed to reduce consumption of electricity, nat-
ural gas, or steam or to improve the manage-
ment of energy demand, or
‘‘(B) any specially defined energy property
(as defined in section 136(c)(2)(A)),
‘‘(2) energy use consulting and audits of com-
mercial, residential, and industrial properties, or
‘‘(3) administrative, promotional, and other
costs associated with expenditures described in para-
graph (1) or (2).
Such term shall not include any expenditure taken into
account in determining the basis of any tangible property
which is owned by the taxpayer and which is of a character
subject to the allowance for depreciation.
‘‘(c) ELECTRIC OR GAS UTILITY.—For purposes of
this section, the term ‘electric or gas utility’ means any
corporation engaged in the furnishing or sale of electric
energy, natural gas, or steam if the rates for such furnish-
ing or sale have been established or approved by a State
or political subdivision thereof, by any agency or instru-
mentality of the United States, or by a public utility or
public service commission or other similar body of any
State or political subdivision thereof or of the District of
Columbia.’’
(b) CONFORMING AMENDMENTS.—
(1) Paragraph (1) of section 263(a) of such
Code is amended by striking ‘‘; or’’ at the end of
subparagraph (F) and inserting a comma, by strik-
ing the period at the end of subparagraph (G) and
inserting ‘‘, or’’, and by adding at the end thereof
the following new subparagraph:
‘‘(H) expenditures for which a deduction is
allowed under section 198.’’
(2) The table of sections for part VI of sub-
chapter B of chapter 1 of such Code is amended by
adding at the end thereof the following new item:
‘‘Sec. 198. Energy conservation expenditures by electric and gas
utilities.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to expenditures paid or incurred
in taxable years beginning after December 31, 1980.
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