H.R.3892 - Financing Lead Out of Water Act of 2025; Flow Act (119th Congress)
Summary
H.R.3892, the Financing Lead Out of Water Act of 2025, aims to amend the Internal Revenue Code of 1986, specifically Section 141(b)(6), to modify private business use requirements for bonds issued for lead service line replacement projects. The bill clarifies that qualified lead service line replacement use will not constitute private business use. This adjustment seeks to facilitate compliance with national primary drinking water regulations for lead by enabling easier access to funding for replacing privately-owned lead service lines connected to public water systems.
Expected Effects
The primary effect of this bill is to make it easier for public water systems to finance the replacement of lead service lines. By removing the 'private business use' designation, the bill potentially unlocks access to tax-exempt bonds for these projects. This could accelerate the removal of lead pipes, improving water quality and public health.
Potential Benefits
- Improved Public Health: Reduces lead exposure, especially for vulnerable populations like children.
- Reduced Financial Burden: Eases the financial strain on public water systems for lead pipe replacement.
- Increased Investment: Encourages investment in water infrastructure projects.
- Compliance with Regulations: Helps water systems meet national drinking water standards.
- Economic Stimulus: Creates jobs in construction and related industries.
Potential Disadvantages
- Potential for Misuse: There is a risk that funds could be mismanaged or used for projects not directly related to lead service line replacement.
- Increased Debt: Public water systems may incur additional debt to finance these projects.
- Taxpayer Burden: Taxpayers may bear the cost of tax-exempt bonds if the projects are not financially viable.
- Limited Scope: The bill only addresses lead service lines and does not cover other sources of lead contamination.
- Delayed Implementation: The effective date is after December 31, 2025, delaying immediate action.
Constitutional Alignment
The bill appears to align with the Constitution's general welfare clause (Preamble). It promotes public health by addressing lead contamination in drinking water. Congress has the power to tax and spend for the general welfare, and this bill modifies the tax code to incentivize lead service line replacement. It falls under Congress's enumerated powers related to regulating interstate commerce, as water systems often serve multiple states.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).