A bill to amend the Internal Revenue Code of 1986 to allow individuals to exclude from gross income payments received under State programs to replace contaminated private water supplies or to replace or rehabilitate private sewage systems.

Amends Internal Revenue Code provisions relating to the exclusion from gross income of certain payments received by individuals under State programs for the primary purpose, as determined by the Administrator of the Environmental Protection Agency, of replacing contaminated private water supplies or rehabilitating defective private sewage systems.