Bill Summary
This bill is an amendment to the Internal Revenue Code of 1986, which is the main federal tax law in the United States. The bill is called the "Financing Lead Out of Water Act of 2025" and its purpose is to modify the private business use requirements for bonds that are issued for lead service line replacement projects. The amendment clarifies that the use of bond proceeds for qualified lead service line replacement will not be considered private business use. It also defines the terms "qualified lead service line replacement use," "lead service line," "national primary drinking water regulation for lead," and "public water system." The effective date of the amendment is December 31, 2025.
Possible Impacts
1. The "Financing Lead Out of Water Act of 2025" could potentially impact people living in areas with lead service lines by allowing for the replacement of privately-owned portions of lead service lines with public funds, which could help maintain compliance with drinking water regulations and improve the safety and quality of their drinking water.
2. The amendment to the Internal Revenue Code of 1986 could affect bond issuers and investors by modifying the private business use requirements for certain bonds. This could potentially impact their financial decisions and investments.
3. The definition of "qualified lead service line replacement use" in this legislation could affect water utility companies by clarifying that the use of proceeds from bonds to replace privately-owned lead service lines does not constitute private business use. This could potentially make it easier for these companies to secure financing for lead service line replacement projects.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2007 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 2007
To amend the Internal Revenue Code of 1986 to modify the private
business use requirements for bonds issued for lead service line
replacement projects.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 10, 2025
Mr. Bennet (for himself and Mr. Justice) introduced the following bill;
which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to modify the private
business use requirements for bonds issued for lead service line
replacement projects.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Financing Lead Out of Water Act of
2025''.
SEC. 2. MODIFICATION OF PRIVATE BUSINESS USE REQUIREMENTS FOR CERTAIN
BONDS.
(a) In General.--Section 141(b)(6) of the Internal Revenue Code of
1986 is amended by adding at the end the following new subparagraph:
``(D) Clarification relating to qualified lead
service line replacement use.--
``(i) In general.--For purposes of this
subsection, qualified lead service line
replacement use shall not constitute private
business use.
``(ii) Definitions.--For purposes of this
subparagraph--
``(I) Qualified lead service line
replacement use.--The term `qualified
lead service line replacement use'
means, with respect to any public water
system, use of the proceeds of an issue
to replace any privately-owned portion
of a lead service line connected to
such system to facilitate, achieve or
maintain compliance with a national
primary drinking water regulation for
lead.
``(II) Lead service line.--The term
`lead service line' has the meaning
given such term in section 1459B(a)(4)
of the Safe Drinking Water Act.
``(III) National primary drinking
water regulation for lead.--The term
`national primary drinking water
regulation for lead' means a national
primary drinking water regulation for
lead promulgated under section 1412 of
such Act.
``(IV) Public water system.--The
term `public water system' has the
meaning given such term in section
1401(4) of such Act.''.
(b) Effective Date.--The amendments made by this section shall
apply to obligations issued after December 31, 2025.
<all>