Read twice and referred to the Committee on Finance.
This bill amends Internal Revenue Code section 136 to expand the tax exclusion for certain conservation subsidies to cover subsidies for water conservation or efficiency measures, storm water management measures, and wastewater management measures. It allows exclusions for subsidies provided (directly or indirectly) by public utilities, storm water management providers, or state and local governments to residents, limited to measures at the taxpayer’s principal residence.
Liberal emphasizes environmental and public-health benefits of water measures
Technically narrow and bipartisan-appealing, but revenue loss and need for offsets could raise objections.
This bill amends Internal Revenue Code section 136 to expand the tax exclusion for certain conservation subsidies to cover subsidies for water conservation or efficiency measures, storm water management measures, and wastewater management measures.
It allows exclusions for subsidies provided (directly or indirectly) by public utilities, storm water management providers, or state and local governments to residents, limited to measures at the taxpayer’s principal residence.
The bill defines the new measure types and providers, updates the definition of public utility to include water sellers, and applies to amounts received after December 31, 2021, with a non-inference clause for earlier tax treatment.
Low-salience, technical tax exclusion with modest fiscal cost has reasonable bipartisan prospects but faces procedural hurdles and revenue-offset scrutiny.
How solid the drafting looks.
Liberal emphasizes environmental and public-health benefits of water measures
These are examples from the analysis, not a ranked list of the most-affected groups.
Liberal emphasizes environmental and public-health benefits of water measures
Likely views the bill positively as a modest federal tax clarification that encourages household-level water conservation and resilience.
Sees expansion to stormwater and wastewater measures as supporting climate adaptation and environmental justice, especially if targeted to homeowners.
Probably supportive but pragmatic: views the bill as a targeted tax-code clarification to avoid taxing conservation rebates.
Wants clear cost estimates, administrative simplicity, and safeguards against unintended subsidies to wealthier households.
Skeptical about creating an expanded tax exclusion that lowers taxable income, viewing it as a targeted carve-out.
May accept narrow clarity for utilities but worries about new federal incentives and revenue loss without offsets.
Reached or meaningfully advanced
Reached or meaningfully advanced
Still ahead
Still ahead
Still ahead
Low-salience, technical tax exclusion with modest fiscal cost has reasonable bipartisan prospects but faces procedural hurdles and revenue-offset scrutiny.
The bill has not accumulated any surfaced votes yet.
Liberal emphasizes environmental and public-health benefits of water measures
Low-salience, technical tax exclusion with modest fiscal cost has reasonable bipartisan prospects but faces procedural hurdles and revenue-…
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