H.R. 448 – Water Conservation Rebate Tax Parity Act

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Updated April 15, 2026 at 11:30 AM UTC

The Water Conservation Rebate Tax Parity Act would change the tax code so that certain subsidies for water‑saving or storm‑water management projects are treated the same as other conservation subsidies. It lets utilities, state or local governments, and storm‑water providers give tax‑free rebates to customers who buy or install water‑conservation or storm‑water measures. The rule applies to subsidies received after Dec. 31, 2015 and does not affect earlier payments.

Key Provisions

Adds water‑conservation or efficiency measures and storm‑water management measures to the list of subsidies that are excluded from taxable income.
Allows public utilities, state or local governments, and storm‑water management providers to give these subsidies directly or indirectly to customers or residents.
Defines a “water conservation or efficiency measure” as any evaluation, installation, or modification aimed at reducing water use or managing water demand for a dwelling.
Defines a “storm‑water management measure” as any installation or modification designed to reduce or manage storm‑water for a dwelling.
Specifies that a “public utility” includes sellers of electricity, natural gas, or water, and a “storm‑water management provider” includes any entity offering storm‑water services.
Sets the effective date for these changes to subsidies received after Dec. 31, 2015 and clarifies they do not apply retroactively before Jan. 1, 2017.

Legislative Activity

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1 earlier action

HouseIntro Referral Latest Action

Referred to the House Committee on Ways and Means.

Ways and Means Committee

January 11, 2017

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HouseIntro Referral

Introduced in House

January 11, 2017

HouseIntro Referral

Referred to the House Committee on Ways and Means.

Ways and Means Committee

January 11, 2017

Bill Text

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Introduced in HouseIssued January 11, 2017

I

115th CONGRESS

1st Session

H. R. 448

IN THE HOUSE OF REPRESENTATIVES

January 11, 2017

Mr. Huffman (for himself, Mr. Rohrabacher, Mr. Doggett, Ms. McSally, and Mr. LaMalfa) 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.

1.

Short title

This Act may be cited as the Water Conservation Rebate Tax Parity Act.

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, 2015.

(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, 2017.