S. 2007: Financing Lead Out of Water Act of 2025

This bill, known as the Financing Lead Out of Water Act of 2025, proposes modifications to the Internal Revenue Code to facilitate the replacement of lead service lines in public water systems. Here is a summary of its key provisions:

Modification of Private Business Use Requirements

The bill seeks to amend Section 141(b)(6) of the Internal Revenue Code by adding a new provision regarding the classification of lead service line replacement projects:

• The bill clarifies that the use of funds from certain bonds for the replacement of lead service lines will not count as "private business use." This is important because private business use restrictions can affect the financing and tax-exempt status of bonds.
• This change is intended to encourage public water systems to utilize funding for replacing privately-owned portions of lead service lines in order to comply with national drinking water regulations regarding lead contamination.

Definitions

The bill provides specific definitions for terms used in the context of lead service line replacement:

• Qualified Lead Service Line Replacement Use: This refers to the use of bond proceeds to replace a privately-owned lead service line connected to a public water system to meet drinking water safety regulations.
• Lead Service Line: Defined according to the Safe Drinking Water Act.
• National Primary Drinking Water Regulation for Lead: Refers to federal regulations under the Safe Drinking Water Act aimed at controlling lead levels in drinking water.
• Public Water System: Defined as per the Safe Drinking Water Act, indicating a system providing water for human consumption to at least 25 people or 15 service connections.

Effective Date

The amendments made by this bill will apply to obligations issued after December 31, 2025. This means that any funding or financing mechanisms put into place for lead service line replacements under this provision will become available after this date.

Relevant Companies

None found