Finance

Senate introduces FLOW Act to streamline LSL substitute financing

A Senate model of the Financing Lead Out of Water (FLOW) Act was launched final week after months of labor by water sector stakeholders. Sponsored by Sen. Michael Bennet (D-Colo.), the invoice was launched with the assist of six unique Senate co-sponsors.

S. 4921, the FLOW Act was developed by the Affiliation of Metropolitan Water Businesses (AMWA) earlier this 12 months primarily based on the expertise of Denver Water when it sought to make use of tax-exempt debt to finance the substitute of public and privately owned lead service traces. Nevertheless, the utility confronted obstacles within the type of IRS guidelines that require documentation of what number of non-public companies operated out of houses the place a non-public lead service line was to get replaced. Denver Water reported that this added months of administrative work and expense to the challenge.

The FLOW Act would amend Part 141 of the federal tax code to permit public water techniques to pay for the substitute of privately-owned lead service traces with tax-exempt bonds, with out first navigating IRS’ “non-public enterprise use take a look at.” At the moment, water techniques should certify to IRS that proceeds from a tax-exempt debt issuance don’t profit non-public entities above a sure threshold – a requirement that in follow has meant that water techniques should confirm whether or not a enterprise operates out of any residence with a privately owned lead service line that might get replaced with these funds.

The FLOW Act was first launched within the Home of Representatives in March with robust business assist together with from AMWA and the American Water Works Affiliation (AWWA). The Senate model of the invoice is an identical to the Home measure, AMWA says.

“This laws wouldn’t solely assist minimize by means of crimson tape, however alleviate a number of the monetary burden that owners sometimes face when changing their lead pipes,” Sen. Bennet stated in a press launch. “We should always study from the experiences of Denver Water and use modern financing to assist remove lead pipes utterly throughout our communities.”

“Many communities are nonetheless working to remove 1000’s of lead service traces under the bottom. This job shouldn’t be made tougher by IRS crimson tape that complicates environment friendly financing choices,” added AMWA CEO Tom Dobbins in a assertion. “The FLOW Act will assist resolve this drawback [and] we commend Senator Bennet for his work on this subject.”

Whereas passage of the Senate measure and its Home companion shouldn’t be sure earlier than the tip of the 12 months, AMWA has stated it plans to enlist its members to assist construct assist for the proposal on Capitol Hill and place it for inclusion in a future package deal of tax laws.

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