
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC136]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
               Subchapter B--Computation of Taxable Income
 
         PART III--ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME
 
Sec. 136. Energy conservation subsidies provided by public 
        utilities
        

(a) Exclusion

    Gross income shall not include the value of any subsidy provided 
(directly or indirectly) by a public utility to a customer for the 
purchase or installation of any energy conservation measure.

(b) Denial of double benefit

    Notwithstanding any other provision of this subtitle, no deduction 
or credit shall be allowed for, or by reason of, any expenditure to the 
extent of the amount excluded under subsection (a) for any subsidy which 
was provided with respect to such expenditure. The adjusted basis of any 
property shall be reduced by the amount excluded under subsection (a) 
which was provided with respect to such property.

(c) Energy conservation measure

                           (1) In general

        For purposes of this section, the term ``energy conservation 
    measure'' means any installation or modification primarily designed 
    to reduce consumption of electricity or natural gas or to improve 
    the management of energy demand with respect to a dwelling unit.

                        (2) Other definitions

        For purposes of this subsection--

        (A) Dwelling unit

            The term ``dwelling unit'' has the meaning given such term 
        by section 280A(f)(1).

        (B) Public utility

            The term ``public utility'' means a person engaged in the 
        sale of electricity or natural gas to residential, commercial, 
        or industrial customers for use by such customers. For purposes 
        of the preceding sentence, 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.

(d) Exception

    This section shall not apply to any payment to or from a qualified 
cogeneration facility or qualifying small power production facility 
pursuant to section 210 of the Public Utility Regulatory Policy Act of 
1978.

(Added Pub. L. 102-486, title XIX, Sec. 1912(a), Oct. 24, 1992, 106 
Stat. 3014; amended Pub. L. 104-188, title I, Sec. 1617(a), (b), Aug. 
20, 1996, 110 Stat. 1858.)

                       References in Text

    Section 210 of the Public Utility Regulatory Policy Act of 1978, 
referred to in subsec. (d), probably means section 210 of the Public 
Utility Regulatory Policies Act of 1978, Pub. L. 95-617, which is 
classified to section 824a-3 of Title 16, Conservation.


                            Prior Provisions

    A prior section 136 was renumbered section 139 of this title.


                               Amendments

    1996--Subsec. (a). Pub. L. 104-188, Sec. 1617(b)(1), reenacted 
heading without change and amended text generally, substituting present 
provisions for former provisions which consisted of general exclusion in 
par. (1) and limitation for exclusion on nonresidential property in par. 
(2).
    Subsec. (c)(1). Pub. L. 104-188, Sec. 1617(a), substituted ``energy 
demand with respect to a dwelling unit.'' for ``energy demand--
        ``(A) with respect to a dwelling unit, and
        ``(B) on or after January 1, 1995, with respect to property 
    other than dwelling units.
The purchase and installation of specially defined energy property shall 
be treated as an energy conservation measure described in subparagraph 
(B).''
    Subsec. (c)(2). Pub. L. 104-188, Sec. 1617(b)(2), struck out ``and 
special rules'' after ``definitions'' in heading, redesignated subpars. 
(B) and (C) as (A) and (B), respectively, and struck out former subpar. 
(A) which related to ``specially defined energy property''.


                    Effective Date of 1996 Amendment

    Section 1617(c) of Pub. L. 104-188 provided that: ``The amendments 
made by this section [amending this section] shall apply to amounts 
received after December 31, 1996, unless received pursuant to a written 
binding contract in effect on September 13, 1995, and at all times 
thereafter.''


                             Effective Date

    Section 1912(c) of Pub. L. 102-486 provided that: ``The amendments 
made by this section [enacting this section and renumbering former 
section 136 as 137] shall apply to amounts received after December 31, 
1992.''
