April 7, 2022 | Cole Karr

The National Special Districts Coalition has endorsed legislation that would allow public water utilities to leverage tax-exempt bonds for the replacement of lead-contaminated service lines on private property.

In a letter sent Thursday to Congressman Daniel Kildee, D-Mich., the Coalition outlined its support for his H.R. 6985, the Finance the Lead Out of Water (FLOW) Act of 2022. The bill would amend the existing tax policy requiring public utilities to sidestep the lengthy, costly Internal Revenue Service’s “Private Business Use Test,” which is required to approve tax-exempt bond revenues’ use for use on private land to ensure bond proceeds are not to mainly benefit private entities.

Lead service line removal can be out for reach for many private households without financial assistance – especially for low- and moderate-income households and within the many disadvantaged communities that special districts serve. NSDC views the proposed exemption as a streamlined approach to relieve public agencies of lengthy, costly regulatory burdens and to foster positive outcomes for customers, ratepayers, and public health. The tool would provide opportunities for special districts providing water services to advance compliance with federal drinking water standards while making a difference in the communities they serve.

H.R. 6985 was introduced on March 8, 2022, and was referred to the House Committee on Ways and Means.
Contact Cole Karr, CSDA Federal Advocacy Coordinator, for questions.