The Financing Lead Out of Water Act of 2025 modifies federal tax law to make it easier for communities to finance lead service line replacements through tax-exempt bonds. Specifically, the bill clarifies that when a public water system uses bond proceeds to replace the privately-owned portions of lead service lines (the pipes connecting homes to the main water system), this does not count as "private business use," which would otherwise disqualify the bonds from receiving tax-exempt status. This change affects water utilities and communities working to remove lead from drinking water to comply with federal safety standards. The legislation applies to bonds issued after December 31, 2025, and aims to reduce the cost of lead pipe replacement by making it more affordable for municipalities to finance these crucial public health infrastructure projects.
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