I 
117TH CONGRESS 
1ST SESSION H. R. 4647 
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 and storm water management measures. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 22, 2021 
Mr. HUFFMAN (for himself, Ms. CHU, Mr. PANETTA, Mr. LOWENTHAL, Mr. 
SCHIFF, Mrs. NAPOLITANO, Mr. SWALWELL, Mrs. KIRKPATRICK, Mr. 
GARAMENDI, Ms. BROWNLEY, Mr. LEVIN of California, Mr. CARBAJAL, 
Mr. BERA, Ms. LEE of California, and Mr. DESAULNIER) 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 
and storm water management measures. 
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 ‘‘Water Conservation 
Rebate Tax Parity Act’’. 
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SEC. 2. MODIFICATIONS TO INCOME EXCLUSION FOR CON-
SERVATION SUBSIDIES. 
(a) IN GENERAL.—Section 136(a) of the Internal 
Revenue Code of 1986 is amended— 
(1) by striking ‘‘any subsidy provided’’ and in-
serting ‘‘any subsidy— 
‘‘(1) provided’’, 
(2) by striking the period at the end and insert-
ing 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 govern-
ment 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 waste-
water management measure, but only if such meas-
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ure is with respect to the taxpayer’s principal resi-
dence.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) DEFINITION OF WATER CONSERVATION OR 
EFFICIENCY MEASURE AND STORM WATER MANAGE-
MENT
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 ‘‘EN-
ERGY 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 modi-
fication 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. 
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‘‘(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 re-
duce or manage amounts of storm water with re-
spect to one or more dwelling units. 
‘‘(4) WASTEWATER MANAGEMENT MEASURE.— 
For purposes of this section, the term ‘wastewater 
management measure’ means any installation or 
modification of property primarily designed to man-
age wastewater (including septic tanks and cess-
pools) with respect to one or more dwelling units.’’. 
(2) DEFINITION OF PUBLIC UTILITY.—Section 
136(c)(5) of such Code (as redesignated by para-
graph (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
PRO-
VIDER.—The term ‘storm water management 
provider’ means a person engaged in the provi-
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(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 measure 
or storm water management measure before January 1, 
2022. 
Æ 
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