This bill amends the Internal Revenue Code to expand an existing income exclusion for certain conservation subsidies. It adds subsidies and rebates for water conservation or efficiency measures, storm water management measures, and wastewater management measures to the payments that can be excluded from taxable income.
The bill says these subsidies may be provided (directly or indirectly) by a public utility to a customer, or by a State or local government to a resident. Wastewater management subsidies are excluded only when the measure is for the taxpayer's principal residence. The bill adds definitions for "water conservation or efficiency measure," "storm water management measure," and "wastewater management measure," and defines who counts as a public utility or a storm water management provider. It also makes clerical changes to the tax code.
The changes apply to amounts received after December 31, 2021. The bill was introduced in the House on March 5, 2025, and referred to the Committee on Ways and Means.
If you get a rebate or subsidy from your water utility, a storm water management provider, or a State or local government to buy or install qualifying water-saving, stormwater, or wastewater systems, this bill would let you exclude that payment from taxable income under the revised rules. For wastewater measures, the exclusion applies only if the work is for your main home. The bill sets definitions for the kinds of measures and the kinds of providers that qualify.
No publicly available information on budgetary effects, revenue changes, or estimated costs is included in the bill text or metadata.
The bill's title and text indicate sponsors intend to treat certain water-related rebates similarly to existing conservation subsidies that are already tax-excluded. No other publicly available statements from proponents are included in the provided materials.
No publicly available information on opposition, objections, or critiques is included in the provided bill text or metadata.