CC SR 20210817 F - Feinstein Bills Letters of Support
CITY COUNCIL MEETING DATE: 08/17/2021
AGENDA REPORT AGENDA HEADING: Consent Calendar
AGENDA TITLE:
Consideration and possible action to authorize the Mayor to sign a letter supporting S.
2430 (Water Conservation Rebates) and S. 2432 (Disaster Mitigation Rebates).
RECOMMENDED COUNCIL ACTION:
(1) Authorize the Mayor to sign a letter supporting S. 2430, which would make rebates
received from water utilities for water conservatio n improvements exempt from
federal taxes; and
(2) Authorize the Mayor to sign a letter supporting S. 2432, which would make rebates
received for making natural disaster mitigation improvements to their homes
exempt from federal taxes.
FISCAL IMPACT: None
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: McKenzie Bright, Administrative Analyst
REVIEWED BY: Karina Bañales, Deputy City Manager
APPROVED BY: Ara Mihranian, AICP, City Manager
ATTACHED SUPPORTING DOCUMENTS:
A. Draft letter of support for S. 2430 (page A-1)
B. Draft letter of support for S. 2432 (page B -1)
C. Text of S. 2430 (as introduced July 22, 2021) (page C-1)
D. Text of S. 2432 (as introduced July 22, 2021) (page D-1)
BACKGROUND AND DISCUSSION:
On July 22, 2021, U.S. Senators Dianne Feinstein and Alex Padilla, of California,
introduced Senate Bill (S.) 2430, the Water Conservation Rebate Tax Parity Act.
Senators Feinstein and Padilla also introduced S. 2432, the Disaster Mitigation and Tax
Parity Act of 2021, along with Senators Richard Burr and Thomas Tillis, of North Carolina.
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S. 2430 would exempt rebates residents receive from water utilities or state/local
governments for water conservation improvements from federal taxes.
S. 2432 would exempt rebates residents receive for making natural disaster
improvements to their homes from federal taxes. Improvements should reduce the
damage that would be done to the residence during a windstorm, earthquake, or wildfire.
Support of this bill aligns with City Council Goal No. 2B, to enhance wildfire home
hardening.
Support of these bills also aligns with the City’s Housing and Local Land Use Legislative
Platform, outlining the City’s support for policies that contribute to sustainable
infrastructure development, which could include water conservation and natural disaster
mitigation efforts.
The City routinely encourages residents to take advantage of state and utility rebates,
including for water conservation and natural disaster improvements to homes. These bills
would exempt these rebates from federal taxes, effectively discounting rebates from
calculations of gross income at the federal level. In the State of California, these rebates
are already exempt from state taxes.
Similar rebate programs are already exempt from federal taxes, such as energy
conservation improvements. Due to the impacts of drought and the potential impact of
natural disasters, especially in California, these tax exemptions help more residents take
advantage of rebate programs without increasing their taxes.
Therefore, Staff recommends the City Council authorize the Mayor to sign the attached
letters of support for S. 2430 and S. 2432, as drafted or with revisions.
ALTERNATIVES:
In addition to the Staff recommendation, the following alternative actions are available for
the City Council’s consideration:
1. Identify revised language to add to the letter(s).
2. Do not authorize the Mayor to sign the letter(s).
3. Take other action, as deemed appropriate.
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August 17, 2021 Via Email
The Honorable Dianne Feinstein
United States Senate
331 Hart Senate Office Building
Washington, D.C. 20510
The Honorable Alex Padilla
United States Senate
112 Hart Senate Office Building
Washington, DC 20510
SUBJECT: Notice of Support for S. 2430
Dear Senator Feinstein and Senator Padilla:
Thank you for introducing the Water Conservation Rebate Tax Parity Act (S. 2430). The
City of Rancho Palos Verdes supports S. 2430, as it would exempt rebates received by
residents for water conservation improvements from federal taxes.
As you know, the State of California is facing a continuing drought. As residents are
encouraged to conserve, utility companies such as the California Water Service, which
serves the Palos Verdes Peninsula, routinely offer rebates to residents for water
conservation improvements.
The City appreciates that your bill would exempt such rebates from federal taxes,
encouraging more residents to utilize rebate programs. For these reasons, the City is
proud to support S. 2430.
Sincerely,
Eric Alegria
Mayor
cc: Ted Lieu, Congressman, California’s 33rd Congressional District
Rancho Palos Verdes City Council
Ara Mihranian, City Manager
Karina Bañales, Deputy City Manager
A-1
August 17, 2021 Via Email
The Honorable Dianne Feinstein
United States Senate
331 Hart Senate Office Building
Washington, D.C. 20510
The Honorable Alex Padilla
United States Senate
112 Hart Senate Office Building
Washington, DC 2051
SUBJECT: Notice of Support for S. 2432
Dear Senator Feinstein and Senator Padilla:
Thank you for introducing the Disaster Mitigation and Tax Parity Act (S. 2432). The City
of Rancho Palos Verdes supports S. 2432, as it would exempt rebates received by
residents for disaster mitigation improvements from federal taxes.
The City of Rancho Palos Verdes is located in a C al Fire-designated Very High Fire
Hazard Severity Zone (VHFHSZ), with a high wildfire risk in addition to earthquake risks
— disasters covered by S. 2432. The City routinely encourages residents to take
advantage of disaster mitigation rebates to help them harden their homes for disasters.
The City appreciates that your bill would exempt such rebates from federal taxes,
encouraging more residents to utilize rebate programs. For these reasons, the City is
proud to support S. 2432.
Sincerely,
Eric Alegria
Mayor
cc: Ted Lieu, Congressman, California’s 33rd Congressional District
Rancho Palos Verdes City Council
Ara Mihranian, City Manager
Karina Bañales, Deputy City Manager
B-1
AlJTHI<NTICAT·~ UB. GOVERNMENT
INFORMA.TION
GPO
117TH CONGRESS
1ST SESSION S.2430
II
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.
IN THE SENATE OF THE UNITED STATES
JULY 22, 2021
Mrs. FEINSTEIN (for herself and Mr. PADILLA) 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 expand
the exclusion for certain conservation subsidies to include
subsidies for water conservation or efficiency measures
and storm water management measures.
1 Be it enacted by the Senate and House of Representa-
2 tives of the United States of America in Congress assembled)
3 SECTION 1. SHORT TITLE.
4 This Act may be cited as the "Water Conservation
5 Rebate Tax Parity Act".
C-1
2
1 SEC. 2. MODIFICATIONS TO INCOME EXCLUSION FOR CON-
2 SERVATION SUBSIDIES.
3 (a) IN GENERAL.-Subsection (a) of section 136 of
4 the Internal Revenue Code of 1986 is amended-
5 (1) by striking "any subsidy provided" and in-
6 serting "any subsidy-
7 " ( 1) provided",
8 (2) by striking the period at the end and insert-
9 ing a comma, and
10 (3) by adding at the end the following new
11 paragraphs:
12 "(2) provided (directly or indirectly) by a public
13 utility to a customer, or by a State or local govern-
14 ment to a resident of such State or locality, for the
15 purchase or installation of any water conservation or
16 efficiency measure, or
17 "(3) provided (directly or indirectly) by a storm
18 water management provider to a customer, or by a
19 State or local government to a resident of such State
20 or locality, for the purchase or installation of any
21 storm water management measure.".
22 (b) CONFORMING AMENDMENTS.-
23 (1) DEFINITION OF WATER CONSERVATION OR
24 EFFICIENCY MEASURE AND STORM WATER MANAGE-
25 MENT MEASURE.-Section 136(c) of the Internal
26 Revenue Code of 1986 is amended-
•S 2430 IS C-2
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(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 "EN-
ERGY 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 modi-
fication 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 re-
duce or manage amounts of storm water with re-
spect to one or more dwelling units.".
(2) DEFINITION OF PUBLIC UTILITY.-Section
136(c)(4) of such Code (as redesignated by para-
•S 2430 IS C-3
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graph (l)(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 PRO-
VIDER.-The term 'storm water management
provider' means a person engaged in the provi-
•S 2430 IS
sion of storm water management measures to
the public.
"(D) PERSON.-For purposes of subpara-
graphs (B) and (C), the term 'person' includes
the Federal Government, a State or local gov-
ernment 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 PUB-
LIC UTILITIES".
C-4
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1 (B) The item relating to section 136 in the
2 table of sections of part III of subchapter B of
3 chapter 1 of such Code is amended-
4 ( i) by inserting "and water" after
5 "energy", and
6 (ii) by striking "provided by public
7 utilities''.
8 (c) EFFECTIVE DATE.-The amendments made by
9 this section shall apply to amounts received after Decem-
10 ber 31, 2021.
11 (d) No lNFERENCE.-Nothing m this Act or the
12 amendments made by this Act shall be construed to create
13 any inference with respect to the proper tax treatment of
14 any subsidy received directly or indirectly from a public
15 utility, a storm water management provider, or a State
16 or local government for any water conservation measure
17 or storm water management measure before January 1,
18 2022.
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•S 2430 IS C-5
AlJTHI<NTICAT·~ UB. GOVERNMENT
INFORMA.TION
GPO
117TH CONGRESS
1ST SESSION S.2432
II
To amend the Internal Revenue Code of 1986 to exclude from gross income
amounts received from State-based catastrophe loss mitigation programs.
IN THE SENATE OF THE UNITED STATES
JULY 22, 2021
Mrs. FEINSTEIN (for herself, Mr. BURR, Mr. PADILLA, and Mr. TILLIS) intro-
duced the following bill; which was read twice and referred to the Com-
mittee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to exclude
from gross income amounts received from State-based
catastrophe loss mitigation programs.
1 Be it enacted by the Senate and House of Representa-
2 tives of the United States of America in Congress assembled)
3 SECTION 1. SHORT TITLE.
4 This Act may be cited as the ''Disaster Mitigation
5 and Tax Parity Act of 2021".
D-1
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1 SEC. 2. EXCLUSION OF AMOUNTS RECEIVED FROM STATE-
2 BASED CATASTROPHE LOSS MITIGATION
3 PROGRAMS.
4 (a) IN GENERAL.-Section 139 of the Internal Rev-
5 enue Code of 1986 is amended by redesignating subsection
6 (h) as subsection (i) and by inserting after subsection (g)
7 the following new subsection:
8 "(h) STATE-BASED CATASTROPHE LOSS MITIGATION
9 PROGRAMS.-
10 "(1) IN GENERAL.-Gross income shall not in-
11 elude any amount received by an individual as a
12 qualified catastrophe mitigation payment under a
13 program established by-
14 "(A) a State,
15 "(B) a political subdivision or instrumen-
16 tality thereof, or
17 "(C) an entity established under State
18 charter,
19 for the purpose of making such payments.
20 "(2) QUALIFIED CATASTROPHE MITIGATION
21 PAYMENT.-For purposes of this section, the term
22 'qualified catastrophe mitigation payment' means
23 any amount which is received by an individual to
24 make improvements to such individual's residence
25 for the sole purpose of reducing the damage that
•S 2432 IS D-2
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1 would be done to such residence by a windstorm,
2 earthquake, or wildfire.
3 "(3) No INCREASE IN BASIS.-Rules similar to
4 the rules of subsection (g)(3) shall apply in the case
5 of this subsection.".
6 (b) CONFORMING AMENDMENTS.-
7 (1) Section 139( d) is amended by striking "and
8 qualified" and inserting ", qualified catastrophe
9 mitigation payments, and qualified".
10 (2) Section 139(i) (as redesignated by sub-
11 section (a)) is amended by striking "or qualified"
12 and inserting ", qualified catastrophe mitigation
13 payment, or qualified".
14 (c) EFFECTIVE DATE.-The amendments made by
15 this section shall apply to taxable years beginning after
16 December 31, 2021.
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•S 2432 IS D-3