26 U.S.C. § 136 — Energy conservation subsidies provided by

Page 615 TITLE 26—INTERNAL REVENUE CODE § 136 tion 201(f) of Pub. L. 105–34, set out as an Effective Date note under section 25A of this title. Amendment by section 211(c) of Pub. L. 105–34 appli- cable to taxable years beginning after Dec. 31, 1997, see section 211(f) of Pub. L. 105–34, set out as a note under section 529 of this title. Amendment by section 213(e)(2) of Pub. L. 105–34 ap- plicable to taxable years beginning after Dec. 31, 1997, see section 213(f) of Pub. L. 105–34, set out as a note under section 26 of this title. EFFECTIVE DATE OF 1996 AMENDMENT Amendment by section 1703(d) of Pub. L. 104–188 effec- tive as if included in the provision of the Revenue Rec- onciliation Act of 1993, Pub. L. 103–66, §§ 13001–13444, to which such amendment relates, see section 1703(o) of Pub. L. 104–188, set out as a note under section 39 of this title. Amendment by section 1806(b)(1) of Pub. L. 104–188 ap- plicable to taxable years ending after Aug. 20, 1996, with transition rules applicable where States or agen- cies or instrumentalities thereof maintain on such date programs under which persons may purchase tuition credits or certificates on behalf of, or make contribu- tions for education expenses of, designated bene- ficiaries, see section 1806(c) of Pub. L. 104–188, set out as an Effective Date note under section 529 of this title. Amendment by section 1807(c)(2) of Pub. L. 104–188 ap- plicable to taxable years beginning after Dec. 31, 1996, see section 1807(e) of Pub. L. 104–188, set out as an Ef- fective Date note under section 23 of this title. EFFECTIVE DATE OF 1990 AMENDMENT Amendment by section 11101(d)(1)(E) of Pub. L. 101–508 applicable to taxable years beginning after Dec. 31, 1990, see section 11101(e) of Pub. L. 101–508, set out as a note under section 1 of this title. Amendment by section 11702(h) of Pub. L. 101–508 ef- fective as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100–647, to which such amendment relates, see section 11702(j) of Pub. L. 101–508, set out as a note under section 59 of this title. EFFECTIVE DATE OF 1989 AMENDMENT Amendment by Pub. L. 101–239 effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100–647, to which such amendment relates, see section 7817 of Pub. L. 101–239, set out as a note under section 1 of this title. EFFECTIVE DATE Section applicable to taxable years beginning after Dec. 31, 1989, see section 6009(d) of Pub. L. 100–647, set out as an Effective Date of 1988 Amendment note under section 86 of this title. PROMOTION OF PUBLIC AWARENESS OF PROGRAM Pub. L. 100–647, title VI, § 6009(b), Nov. 10, 1988, 102 Stat. 3690, provided that: ‘‘The Secretary of the Treas- ury or his delegate shall take such actions as may be necessary to make the general public aware of the pro- gram established by this section [enacting this section, amending sections 86, 219, and 469 of this title, renum- bering former section 135 of this title as section 136 of this title, and enacting provisions set out as notes below and under section 86 of this title].’’ PARENTAL ASSISTANCE WITH TUITION STAMP STUDY Pub. L. 100–647, title VI, § 6009(e), Nov. 10, 1988, 102 Stat. 3690, directed Secretary of the Treasury or his delegate, after consultation with Secretary of Edu- cation or his delegate, to conduct a study of feasibility of using stamps or similar programs to encourage and facilitate savings by parents towards purchase of Series EE bonds eligible for exclusion and to submit, not later than Dec. 31, 1989, results of such study, together with any recommendations deemed appropriate, to Com- mittee on Ways and Means of House of Representatives and Committee on Finance of Senate. § 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 meas- ure. (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 ex- tent of the amount excluded under subsection (a) for any subsidy which was provided with re- spect to such expenditure. The adjusted basis of any property shall be reduced by the amount ex- cluded 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 ‘‘en- ergy conservation measure’’ means any instal- lation 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 pur- suant to section 210 of the Public Utility Regu- latory Policy Act of 1978. (Added Pub. L. 102–486, title XIX, § 1912(a), Oct. 24, 1992, 106 Stat. 3014; amended Pub. L. 104–188, title I, § 1617(a), (b), Aug. 20, 1996, 110 Stat. 1858.) Editorial Notes 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 140 of this title. Page 616 TITLE 26—INTERNAL REVENUE CODE § 137 1 So in original. Probably should be followed by a comma. 2 See References in Text note below. AMENDMENTS 1996—Subsec. (a). Pub. L. 104–188, § 1617(b)(1), reen- acted heading without change and amended text gen- erally, substituting present provisions for former provi- sions 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, § 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 en- ergy property shall be treated as an energy conserva- tion measure described in subparagraph (B).’’ Subsec. (c)(2). Pub. L. 104–188, § 1617(b)(2), struck out ‘‘and special rules’’ after ‘‘definitions’’ in heading, re- designated subpars. (B) and (C) as (A) and (B), respec- tively, and struck out former subpar. (A) which related to ‘‘specially defined energy property’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1996 AMENDMENT Pub. L. 104–188, title I, § 1617(c), Aug. 20, 1996, 110 Stat. 1858, provided that: ‘‘The amendments made by this section [amending this section] shall apply to amounts received after December 31, 1996, unless received pursu- ant to a written binding contract in effect on Sep- tember 13, 1995, and at all times thereafter.’’ EFFECTIVE DATE Pub. L. 102–486, title XIX, § 1912(c), Oct. 24, 1992, 106 Stat. 3016, provided that: ‘‘The amendments made by this section [enacting this section and renumbering former section 136 as 137] shall apply to amounts re- ceived after December 31, 1992.’’ § 137. Adoption assistance programs (a) Exclusion (1) In general Gross income of an employee does not in- clude amounts paid or expenses incurred by the employer for qualified adoption expenses in connection with the adoption of a child by an employee if such amounts are furnished pursuant to an adoption assistance program. (2) $10,000 exclusion for adoption of child with special needs regardless of expenses In the case of an adoption of a child with special needs which becomes final during a taxable year, the qualified adoption expenses with respect to such adoption for such year shall be increased by an amount equal to the excess (if any) of $10,000 over the actual aggre- gate qualified adoption expenses with respect to such adoption during such taxable year and all prior taxable years. (b) Limitations (1) Dollar limitation The aggregate of the amounts paid or ex- penses incurred which may be taken into ac- count under subsection (a) for all taxable years with respect to the adoption of a child by the taxpayer shall not exceed $10,000. (2) Income limitation The amount excludable from gross income under subsection (a) for any taxable year shall be reduced (but not below zero) by an amount which bears the same ratio to the amount so excludable (determined without regard to this paragraph but with regard to paragraph (1)) as— (A) the amount (if any) by which the tax- payer’s adjusted gross income exceeds $150,000, bears to (B) $40,000. (3) Determination of adjusted gross income For purposes of paragraph (2), adjusted gross income shall be determined— (A) without regard to this section and sec- tions 85(c) 1 221, 911, 931, and 933, and (B) after the application of sections 86, 135, 219, and 469. (c) Adoption assistance program For purposes of this section, an adoption as- sistance program is a separate written plan of an employer for the exclusive benefit of such employer’s employees— (1) under which the employer provides such employees with adoption assistance, and (2) which meets requirements similar to the requirements of paragraphs (2), (3), (5), and (6) of section 127(b). An adoption reimbursement program operated under section 1052 of title 10, United States Code (relating to armed forces) or section 541 2 of title 14, United States Code (relating to members of the Coast Guard) shall be treated as an adoption assistance program for purposes of this section. (d) Qualified adoption expenses For purposes of this section, the term ‘‘quali- fied adoption expenses’’ has the meaning given such term by section 23(d) (determined without regard to reimbursements under this section). (e) Certain rules to apply Rules similar to the rules of subsections (e), (f), and (g) of section 23 shall apply for purposes of this section. (f) Adjustments for inflation In the case of a taxable year beginning after December 31, 2002, each of the dollar amounts in subsection (a)(2) and paragraphs (1) and (2)(A) of subsection (b) shall be increased by an amount equal to— (1) such dollar amount, multiplied by (2) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘‘calendar year 2001’’ for ‘‘cal- endar year 2016’’ in subparagraph (A)(ii) there- of. If any amount as increased under the preceding sentence is not a multiple of $10, such amount shall be rounded to the nearest multiple of $10. (Added Pub. L. 104–188, title I, § 1807(b), Aug. 20, 1996, 110 Stat. 1901; amended Pub. L. 105–34, title XVI, § 1601(h)(2)(C), Aug. 5, 1997, 111 Stat. 1092; Pub. L. 105–277, div. J, title IV, § 4003(a)(2)(C), Oct. 21, 1998, 112 Stat. 2681–908; Pub. L. 107–16, title II, § 202(a)(2), (b)(1)(B), (2)(B), (d)(2), (e)(2), title IV, § 431(c)(1), June 7, 2001, 115 Stat. 47, 48, 68; Pub. L. 107–147, title IV, §§ 411(c)(2), 418(a)(2),