Water Conservation Rebate Tax Parity Act
Bill: S.2430 | Sponsor: Sen. Feinstein, Dianne (D-CA)
Policy area: Taxation

Summary:
Water Conservation Rebate Tax Parity Act
This bill expands the tax exclusion for energy conservation subsidies provided by public utilities to include certain subsidies for water conservation or efficiency measures and storm water management measures.
The bill excludes from gross income subsidies provided (directly or indirectly) (1) by a public utility 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 water conservation or efficiency measure; and (2) 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.

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 Representatives 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''.

SEC. 2. MODIFICATIONS TO INCOME EXCLUSION FOR CONSERVATION SUBSIDIES.

    (a) In General.--Subsection (a) of section 136 of the Internal 
Revenue Code of 1986 is amended--
            (1) by striking ``any subsidy provided'' and inserting 
        ``any subsidy--
            ``(1) provided'',
            (2) by striking the period at the end and inserting 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 government to a resident 
        of such State or locality, for the purchase or installation of 
        any water conservation or efficiency measure, or
            ``(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.''.
    (b) Conforming Amendments.--
            (1) Definition of water conservation or efficiency measure 
        and storm water management 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 ``Energy conservation 
                measure'', and
                    (C) by redesignating paragraph (2) as paragraph (4) 
                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 modification 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.
            ``(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 
        reduce or manage amounts of storm water with respect to one or 
        more dwelling units.''.
            (2) Definition of public utility.--Section 136(c)(4) of 
        such Code (as redesignated by paragraph (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 provider.--The term 
                `storm water management provider' means a person 
                engaged in the provision of storm water management 
                measures to the public.
                    ``(D) Person.--For purposes of subparagraphs (B) 
                and (C), the term `person' includes the Federal 
                Government, a State or local government or any 
                political subdivision thereof, or any instrumentality 
                of any of the foregoing.''.
            (3) Clerical amendments.--
                    (A) The heading of section 136 of such Code is 
                amended--
                            (i) by inserting ``and water'' after 
                        ``energy'', and
                            (ii) by striking ``provided by public 
                        utilities''.
                    (B) The item relating to section 136 in the table 
                of sections of part III of subchapter B of chapter 1 of 
                such Code is amended--
                            (i) by inserting ``and water'' after 
                        ``energy'', and
                            (ii) by striking ``provided by public 
                        utilities''.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts received after December 31, 2021.
    (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.
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