Flow Act
- Bill Number
- H.R. 3892
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2025-06-10: Referred to the House Committee on Ways and Means.
- Last Updated
- 2025-12-13T09:06:51Z
AI-Generated Summary
Purpose
The "Financing Lead Out of Water Act of 2025" (or "Flow Act") aims to make it easier for public water systems to finance the replacement of lead service lines—pipes that carry drinking water from the main line to homes—by adjusting tax rules for bonds used in these projects. Specifically, it ensures that replacing privately owned portions of these lines does not violate federal tax-exempt bond restrictions, helping communities comply with safe drinking water standards and reduce lead exposure risks.
Key Provisions
- Amendment to Tax Code: Adds a new section to the Internal Revenue Code (Section 141(b)(6)) stating that "qualified lead service line replacement use" does not count as "private business use," which would otherwise limit the tax-exempt status of bonds.
- Definition of Qualified Use: This covers using bond proceeds to replace the privately owned parts of lead service lines in public water systems (like municipal water supplies) to meet or maintain federal drinking water rules on lead limits.
- Key Terms Explained:
- Lead service line: The pipe connecting a home to the public water main, as defined in the Safe Drinking Water Act.
- National primary drinking water regulation for lead: Federal standards set by the Environmental Protection Agency (EPA) under the Safe Drinking Water Act to limit lead in tap water.
- Public water system: Any system providing water to at least 15 connections or 25 people for 60+ days a year, per the Safe Drinking Water Act.
- Effective Date: Applies to bonds issued after December 31, 2025.
Significant Changes to Existing Law
- Under current tax law, tax-exempt bonds (used by governments for public projects) cannot finance private property without risking loss of tax benefits due to "private business use" rules, which prevent bonds from benefiting private entities too much.
- This bill creates an exception specifically for lead service line replacements on private property, clarifying that such use is exempt from these restrictions. It does not alter broader bond rules but carves out this targeted allowance to support public health goals.
Potential Impacts
- On Government Agencies: Local governments and public water utilities can more readily issue low-cost, tax-exempt bonds for lead removal, potentially speeding up infrastructure upgrades without needing alternative funding sources.
- On Citizens: Improves access to safer drinking water by facilitating faster replacement of lead pipes, reducing health risks like developmental issues in children from lead exposure, especially in older or low-income communities.
- On International Relations: No direct impact, as the bill focuses on domestic water infrastructure and tax policy.
- Overall, it could lower project costs and accelerate compliance with EPA lead rules, benefiting public health without increasing federal spending.
Main Stakeholders Affected
- Public Water Systems and Local Governments: Primary beneficiaries, as they can use bonds more flexibly for replacements.
- Homeowners and Residents: Especially those in areas with aging lead pipes, gaining safer water and possibly lower long-term health costs.
- Bond Issuers and Investors: Tax-exempt status makes bonds more attractive, aiding financing for utilities.
- Federal Agencies like the EPA: Supports enforcement of drinking water standards under the Safe Drinking Water Act without new regulatory burdens.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens ties between tax policy and environmental health laws by referencing the Safe Drinking Water Act, potentially setting a precedent for future exemptions in public-private infrastructure projects. It maintains the integrity of tax-exempt bond rules while addressing a specific public need.
- Constitutional: No apparent challenges; aligns with Congress's authority to regulate taxation and interstate commerce, including environmental protections.
- Political: Introduced with bipartisan support (sponsors from both parties), reflecting a non-partisan focus on public health infrastructure. It could encourage similar targeted fixes for other aging water systems, though implementation depends on state and local adoption post-2025.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Tenney, Claudia [R-NY-24]
Cosponsors (8)
Rep. Moore, Gwen [D-WI-4], Rep. Kelly, Mike [R-PA-16], Rep. Stevens, Haley M. [D-MI-11], Rep. Pou, Nellie [D-NJ-9], Rep. Vindman, Eugene Simon [D-VA-7], Rep. Lawler, Michael [R-NY-17], Rep. McDonald Rivet, Kristen [D-MI-8], Rep. Olszewski, Johnny [D-MD-2]
Recent Actions
- 2025-06-10: Referred to the House Committee on Ways and Means.
- 2025-06-10: Introduced in House
- 2025-06-10: Introduced in House
Bill Versions
- Financing Lead Out of Water Act of 2025 — issued 2025-06-10 — PDF (3 pages)