S. 1239Senate117th Congress (2021-2023)In Committee

A bill to amend the Internal Revenue Code of 1986 to provide an exclusion from gross income for certain waste water management subsidies.

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Updated February 8, 2026 at 1:53 AM UTC

The bill amends the Internal Revenue Code to let taxpayers exclude from taxable income certain subsidies they receive from state or local governments for buying or installing wastewater management measures at their main home. It defines what counts as a wastewater management measure, such as septic tanks or cesspools, and applies the change to subsidies received after December 31, 2018.

Key Provisions

Allows exclusion from gross income for subsidies provided by state or local governments for the purchase or installation of wastewater management measures at a taxpayer’s principal residence.
Defines “wastewater management measure” as any installation or modification primarily designed to manage wastewater for one or more dwelling units.
Updates Section 136 headings to include “and waste water” and removes references to “provided by public utilities.”
Effective date set for amounts received after December 31, 2018.

Legislative Activity

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1 earlier action

SenateIntro Referral Latest Action

Read twice and referred to the Committee on Finance.

Finance Committee

April 20, 2021

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SenateIntro Referral

Introduced in Senate

April 20, 2021

SenateIntro Referral

Read twice and referred to the Committee on Finance.

Finance Committee

April 20, 2021

Bill Text

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Introduced in SenateIssued April 20, 2021

117th CONGRESS

1st Session

S. 1239

IN THE SENATE OF THE UNITED STATES

April 20, 2021

Mrs. Gillibrand introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to provide an exclusion from gross income for certain waste water management subsidies.

Modifications to income exclusion for certain waste water management subsidies

(a)

In general

Section 136(a) 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 , or, and

(3)

by adding at the end the following new paragraph:

(2)

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 wastewater management measure, but only if such measure is with respect to the taxpayer’s principal residence.

(b)

Definition of waste water management measure

Section 136(c) of such Code is amended—

(1)

by striking Energy conservation measure in the heading thereof and inserting Definitions,

(2)

by striking In general in the heading of paragraph (1) and inserting Energy conservation measure, and

(3)

by redesignating paragraph (2) as paragraph (3) and by inserting after paragraph (1) the following:

(2)

Wastewater management measure

For purposes of this section, the term wastewater management measure means any installation or modification of property primarily designed to manage wastewater (including septic tanks and cesspools) with respect to one or more dwelling units.

(c)

Clerical amendments

(1)

The heading for section 136 of such Code is amended—

(A)

by inserting and waste water after energy, and

(B)

by striking provided by public utilities.

(2)

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—

(A)

by inserting and waste water after energy, and

(B)

by striking provided by public utilities.

(d)

Effective date

The amendments made by this section shall apply to amounts received after December 31, 2018.