Press release:
Congresswoman Claudia Tenney (NY-24), member of the Ways and Means Committee, today cosponsored the Financing Lead Out of Water (FLOW) Act, bipartisan legislation that will remove federal red tape to help more municipalities finance water projects focused on the removal of lead service lines. The legislation will make it easier for upstate New York counties to finance and execute water projects.
This legislation was introduced in the House of Representatives by Congressman Dan Kildee (MI-8).
The FLOW Act would allow bonds issued by public water utilities to finance the replacement of private lead service lines to bypass the U.S. Internal Revenue Service’s (IRS’s) “private business use test.” Streamlining this process in the tax code will help more communities access low-cost financing for lead service line replacement. This becomes more important as laws regulating lead in drinking water are updated nationwide.
Lead service lines are unique pieces of infrastructure often owned by the local government and private citizens. Removing them is costly but can be financed by issuing tax-exempt bonds. However, under current law, if a water utility issues bonds to fund the replacement of lead service lines buried on private property, the utility must prove that the bond proceeds will not mainly benefit private businesses. Providing this documentation to the IRS requires extensive and costly analysis, delaying these infrastructure projects. The FLOW Act would remove this expensive and time-consuming barrier.
“Outdated lead pipes are still an issue for many communities, but the process to install new pipes is often filled with unnecessary and costly roadblocks for municipalities,” said Congresswoman Claudia Tenney. “The FLOW Act removes the federal red tape that prevents too many of our communities from affordably tapping into the investments they need to provide affordable, clean drinking water. I'm introducing this bill to support water infrastructure programs and address hazardous lead pipes.”
