September 22, 2022
The Financing Lead Out of Water Act Allows Public Water Utilities to Issue Tax-Exempt Bonds to Fund Public and Private Lead Pipe Removal
U.S. Senators Chris Van Hollen and Ben Cardin (both D-Md.) with Senators Michael Bennet (D-Colo.), Cory Booker (D-N.J.), Sherrod Brown (D-Ohio), Amy Klobuchar (D-Minn.) and Dianne Feinstein (D-Calif.) on Thursday introduced the Financing Lead Out of Water (FLOW) Act. The FLOW Act would reduce exposure to lead in old water pipes by making it easier for cities and utilities to issue bonds to finance replacement projects.
“The use of lead service lines poses a constant threat to the health and safety of our communities, putting the well-being of our most vulnerable — including children and the elderly — at greater risk. This legislation will speed up the lead pipe replacement process and help communities access low-cost financing by cutting red tape that slows down local governments in modernizing our water infrastructure,” said Senator Van Hollen.
“Millions of households across America still have lead pipes delivering water to their homes. Access to low-cost financing is a common barrier for local communities in Maryland and elsewhere when considering projects to fully replace lead service lines and protect public health,” said Senator Cardin. “Our bicameral legislation would make it easier for publicly owned water utilities to use tax-exempt bonds to get the lead out of our water infrastructure and provide safe, affordable drinking water.”
According to the U.S. Environmental Protection Agency (EPA), between 6 to 10 million homes in the U.S. currently have lead water pipes, also known as lead service lines (LSL), that connect the main water line located underground to their home’s internal plumbing system. Although public utilities across the country are replacing their publicly owned lead service lines, replacement projects have moved slowly for privately owned pipes serving residences due to the costly financial responsibility of replacing these lines.
The FLOW Act provides an explicit guarantee in the tax code to allow public water utilities to issue tax-exempt bonds to help pay for the removal and replacement of both the publicly- and privately-owned lead service lines, resolving the full scale of the issue for residents in areas with lead pipes. This bill also helps funds for lead pipe replacement from the American Rescue PlanAct and the Bipartisan Infrastructure Law make a deeper impact on replacing the nation’s essential water infrastructure.
Last week, the U.S. Environmental Protection Agency (EPA) announced a record $184 millionare available from the Bipartisan Infrastructure Law funds to repair and improve Maryland’s water infrastructure. This record funding, delivered through Maryland’s Clean Water and Drinking Water State Revolving Fund Programs, will help communities across the state access clean, safe, and reliable drinking water, prevent flooding, collect and treat wastewater to protect public health, and safeguard vital waterways.
The bill text is available HERE.
“Coloradans deserve to know the water they and their children drink is safe,” said Senator Bennet. “This legislation would not only help cut through red tape, but alleviate some of the financial burden that homeowners typically face when replacing their lead pipes. We should learn from the experiences of Denver Water and use innovative financing to help eliminate lead pipes completely across our communities.”
“It is vital that every American has access to safe, clean drinking water,” said Senator Booker.“This legislation will reduce financial burdens on homeowners and cut through the administrative challenges localities face to replace the portion of lead service lines that are privately owned. Lead in drinking water is a national public health emergency, and I commend Senator Bennet for his leadership on this issue.”
“Families shouldn’t have to worry about whether or not the water coming out of the faucet is safe for their children to drink,” said Senator Brown. “Because of the work we did in the American Rescue Plan and Bipartisan Infrastructure Plan, Ohio communities will be able to replace old pipes, using American-made materials and installed by American workers, and the FLOW Act will ensure that these investments reach even more Ohioans.”
“In California, at least 65,000 homes have lead water pipes, a particular danger for children whose brain growth and development can be inhibited. This bill will revise IRS rules to allow public water utilities to help pay to replace these dangerous pipes. We must address this problem now before more children are harmed,” said Senator Feinstein.