CA AB2142

Excludes from gross income any rebate, voucher, or financial incentive received from a public water system, local government, or state agency for participation in a turf replacement water conservation program for taxable years beginning January 1, 2022 through December 31, 2026.

Applies the exclusion under both the Personal Income Tax Law (Section 17138.2) and Corporation Tax Law (Section 24308.9).

Defines "public water system" according to Section 116275 of the Health and Safety Code.

Requires the Department of Finance to analyze these tax expenditures in its annual tax expenditure report to the Legislature to determine if objectives are being met.

Both new sections automatically repeal on December 1, 2027, and the bill takes effect immediately as a tax levy.