The Advancing Water Reuse Act creates a federal tax credit equal to 30 percent of qualified investment costs for water reuse projects undertaken by businesses and municipalities. The credit applies to companies in industrial, manufacturing, data center, and food processing facilities that install or upgrade systems to recycle water instead of using freshwater, as well as to municipalities that build or expand water recycling systems. The legislation also allows businesses to claim the credit when they transfer water reuse equipment to utilities under a written agreement, ensuring the property owner rather than the utility receives the tax benefit. The tax credit applies to property placed in service starting after the bill's enactment through December 31, 2032. This incentive is designed to encourage private and public investment in water conservation infrastructure by reducing the upfront costs of transitioning to recycled water systems.
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