SEPTIC Act
- Bill Number
- H.R. 8280
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Status
- Introduced
- Latest Action
- 2026-04-14: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-04-21T06:23:28Z
AI-Generated Summary
Purpose
The SEPTIC Act (H.R. 8280) aims to encourage wastewater infrastructure improvements by excluding certain state or local government subsidies from federal taxable income. This makes financial aid for septic systems and similar measures tax-free for homeowners.
Key Provisions
- Income Exclusion: Amends Section 136 of the Internal Revenue Code to exclude from gross income any subsidy (direct or indirect) provided by a state or local government to a resident for buying or installing a "wastewater management measure" at their residence.
- Definition of Wastewater Management Measure: New term defined as any installation or modification of property (e.g., septic tanks or cesspools) primarily designed to handle wastewater for one or more dwelling units.
- Scope: Builds on existing exclusions for energy conservation subsidies from public utilities by adding wastewater subsidies from state/local governments.
- Effective Date: Applies to subsidies received after the date of enactment, in tax years ending after that date.
- Clerical Updates: Revises headings and table of contents in the tax code to include "wastewater" alongside "energy."
Significant Changes to Existing Law
- Expands Section 136(a), which previously only excluded subsidies for energy conservation measures (like insulation or storm windows) provided by public utilities.
- Introduces a new category for wastewater management, broadening eligibility to state/local government subsidies (not limited to utilities) and focusing on residential properties.
- Shifts section headings from "Energy Conservation Measure" to "Definitions" and updates the overall section title to "Energy and wastewater subsidies."
Potential Impacts
- Citizens/Homeowners: Reduces tax burden on subsidies for septic upgrades, potentially lowering costs for maintaining or improving onsite wastewater systems, especially in rural or underserved areas without municipal sewers.
- Government Agencies: State and local governments can offer subsidies more attractively without recipients facing federal taxes; may boost programs for environmental protection and public health.
- No notable international relations impact.
Main Stakeholders Affected
- Primary: Residential property owners (taxpayers) receiving subsidies for wastewater systems.
- Secondary: State and local governments funding these programs; the Internal Revenue Service (IRS) in administering exclusions.
- Indirect: Environmental groups, public health officials, and communities reliant on septic systems.
Notable Legal, Constitutional, or Political Implications
- Legal: Straightforward tax code amendment with clear definitions to minimize disputes; no retroactive application.
- Constitutional: None identified; aligns with Congress's taxing and spending powers.
- Political: Bipartisan sponsorship (Democrats and Republicans); promotes infrastructure without new spending, potentially aiding rural development and water quality efforts.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Suozzi, Thomas R. [D-NY-3]
Cosponsors (3)
Rep. Bilirakis, Gus M. [R-FL-12], Rep. Bean, Aaron [R-FL-4], Rep. Steube, W. Gregory [R-FL-17]
Recent Actions
- 2026-04-14: Referred to the House Committee on Ways and Means.
- 2026-04-14: Introduced in House
- 2026-04-14: Introduced in House
Bill Versions
- Septic Exclusion for Property owners through Tax-free Infrastructure Compensation Act — issued 2026-04-14 — PDF (4 pages)