[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5438 Introduced in House (IH)]

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117th CONGRESS
  1st Session
                                H. R. 5438

To provide incentives for the purchase of water-efficient products, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 30, 2021

    Mr. Cartwright (for himself, Mr. Blumenauer, Ms. Brownley, Mr. 
 Connolly, Ms. Eshoo, Mr. Evans, Mr. Garcia of Illinois, Mr. Huffman, 
  Mr. Khanna, Mr. Lowenthal, Ms. Norton, Ms. Pingree, Mr. Raskin, Mr. 
 Takano, Ms. Velazquez, and Mr. Welch) introduced the following bill; 
which was referred to the Committee on Ways and Means, and in addition 
to the Committees on Energy and Commerce, and Oversight and Reform, for 
a period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
To provide incentives for the purchase of water-efficient products, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Water Advanced Technologies for 
Efficient Resource Use Act of 2021''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) Agency.--The term ``agency'' has the meaning given such 
        term in section 7902(a) of title 5, United States Code.
            (3) Covered consumer.--The term ``covered consumer'' means 
        an individual served by an eligible entity.
            (4) Eligible entity.--The term ``eligible entity'' means--
                    (A) a State, local, or Tribal government;
                    (B) a drinking water utility or wastewater utility;
                    (C) a municipal water authority or a regional water 
                authority; or
                    (D) a nonprofit organization.
            (5) Incentive.--The term ``incentive'' includes--
                    (A) rebates, vouchers, and other financial 
                incentives; and
                    (B) the direct installation of a WaterSense 
                product.
            (6) Nonprofit organization.--The term ``nonprofit 
        organization'' means an organization that--
                    (A) is described in section 501(c)(3) of the 
                Internal Revenue Code of 1986 (26 U.S.C. 501(c)(3)); 
                and
                    (B) is exempt from taxation under section 501(a) of 
                such Code.
            (7) Product.--The term ``product'' means a product, 
        building, landscape, facility, process, or service.
            (8) State.--The term ``State'' means each of the several 
        States of the United States, the District of Columbia, Puerto 
        Rico, the United States Virgin Islands, Guam, American Samoa, 
        and the Commonwealth of the Northern Mariana Islands.
            (9) Watersense product.--The term ``WaterSense product'' 
        means a product that is certified to display the WaterSense 
        label under the WaterSense program established under section 
        324B of the Energy Policy and Conservation Act (42 U.S.C. 
        6294b).

SEC. 3. FEDERAL PROCUREMENT OF WATERSENSE PRODUCTS.

    (a) Procurement.--
            (1) In general.--Except as provided in paragraph (2), in 
        procuring any water-consuming product, the head of an agency 
        shall procure a WaterSense product.
            (2) Exceptions.--Paragraph (1) does not apply if--
                    (A) with respect to the type of water-consuming 
                product being procured, the head of an agency finds, in 
                writing, that--
                            (i) no WaterSense product is cost-effective 
                        over the life of such type of product, taking 
                        current and future water and wastewater cost 
                        savings into account; or
                            (ii) no WaterSense product of such type is 
                        reasonably available to meet the functional 
                        requirements of the agency; or
                    (B) the water-consuming product being procured is 
                designed for use in combat or combat-related missions.
    (b) Installation and Maintenance.--As applicable, the head of an 
agency that procures a WaterSense product under subsection (a)(1) shall 
use a certified professional (including a licensed plumber or a 
licensed mechanical contractor, as appropriate) to install and maintain 
such product.
    (c) Measures To Reduce Water Consumption.--The head of each agency 
shall consider adopting measures to reduce agency water consumption, 
including such measures as the use of--
            (1) water reuse, reclamation, or recycling technology;
            (2) water leak detection technology; and
            (3) products that--
                    (A) do not consume water; and
                    (B) perform similar functions as comparable water-
                consuming products.
    (d) Listing of WaterSense Products.--The Administrator of General 
Services shall clearly identify and prominently display, in a listing 
of water-consuming products, WaterSense products.
    (e) Regulations.--Not later than 180 days after the date of 
enactment of this section, the Administrator of the Environmental 
Protection Agency and the Director of the Office of Management and 
Budget shall issue regulations to carry out this section.

SEC. 4. INCENTIVES FOR THE PURCHASE OF WATERSENSE PRODUCTS.

    (a) Establishment.--The Administrator shall establish a program to 
provide grants to eligible entities to provide incentives to covered 
consumers for the purchase of a WaterSense product.
    (b) Eligibility.--To be eligible to receive a grant under this 
section, an eligible entity shall--
            (1) submit an application to the Administrator at such 
        time, in such form, and containing such information as the 
        Administrator may require; and
            (2) provide assurances, which the Administrator determines 
        are satisfactory, that the eligible entity will use such grant 
        to supplement, but not supplant, other incentives that are 
        available to a covered consumer for the purchase of a 
        WaterSense product.
    (c) Evaluation Criteria for Applications.--
            (1) In general.--In evaluating an application submitted 
        under subsection (b)(1), the Administrator shall consider--
                    (A) the estimated effect of providing incentives;
                    (B) if the eligible entity previously received a 
                grant under this section--
                            (i) the degree to which the use of such 
                        grant encouraged the purchase of WaterSense 
                        products; and
                            (ii) whether there are amounts of such 
                        grant that remain unused; and
                    (C) whether the eligible entity promotes or 
                implements a program to recycle or manage the disposal 
                of any products that are replaced as a result of the 
                provision of incentives under this section.
            (2) Priority.--The Administrator shall prioritize providing 
        grants under this section to eligible entities that will 
        provide incentives to low- and middle-income households.
    (d) Use of Grant.--
            (1) In general.--An eligible entity that receives a grant 
        under this section shall--
                    (A) use such grant to provide incentives to covered 
                consumers that purchase a WaterSense product; or
                    (B) with approval from the Administrator, provide 
                some, or all, of such grant to another eligible entity 
                for use in accordance with subparagraph (A).
            (2) Administrative costs.--Not more than 50 percent of each 
        grant provided under this section may be used to pay for the 
        administrative cost of providing incentives in accordance with 
        paragraph (1).
            (3) Incentive amounts.--With respect to rebates, vouchers, 
        and other such financial incentives, an eligible entity shall 
        determine the amount to provide based on the following:
                    (A) The amount of the grant provided to the 
                eligible entity under this section.
                    (B) The amount of any other incentives that are 
                available to a covered consumer for the purchase of a 
                WaterSense product.
                    (C) The estimated amount necessary to encourage a 
                covered consumer to purchase a WaterSense product.
                    (D) As applicable, the costs to a covered consumer 
                for onsite preparation, assembly, and installation of a 
                WaterSense product.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section--
            (1) $50,000,000 for fiscal year 2022;
            (2) $100,000,000 for fiscal year 2023;
            (3) $150,000,000 for fiscal year 2024;
            (4) $100,000,000 for fiscal year 2025; and
            (5) $50,000,000 for fiscal year 2026.

SEC. 5. EXCLUSION FROM GROSS INCOME OF AMOUNTS RECEIVED AS INCENTIVES 
              FOR THE PURCHASE OF WATERSENSE PRODUCTS.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting before section 
140 the following new section:

``SEC. 139I. INCENTIVES FOR THE PURCHASE OF WATERSENSE PRODUCTS.

    ``(a) In General.--In the case of an individual, gross income does 
not include any amount received as an incentive under section 3 of the 
Water Advanced Technologies for Efficient Resource Use Act of 2021.
    ``(b) Denial of Double Benefit.--
            ``(1) Deductions and credits.--No deduction or credit under 
        this subtitle shall be allowed for any expenditure with respect 
        to which any amount excluded under subsection (a) was provided.
            ``(2) Basis adjustment.--The adjusted basis of any property 
        with respect to which an amount excluded under subsection (a) 
        is provided shall be reduced by the amount so excluded.''.
    (b) Conforming Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of such Code is amended by inserting before 
the item relating to section 140 the following new item:

``Sec. 139I. Incentives for the purchase of WaterSense products.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this section.

SEC. 6. MODIFICATIONS TO INCOME EXCLUSION FOR CONSERVATION SUBSIDIES.

    (a) In General.--Subsection (a) of section 136 of the Internal 
Revenue Code of 1986 is amended--
            (1) by striking ``any subsidy provided'' and inserting 
        ``any subsidy--
            ``(1) provided'',
            (2) by striking the period at the end and inserting a 
        comma, and
            (3) by adding at the end the following new paragraphs:
            ``(2) provided (directly or indirectly) by a public utility 
        to a customer, or by a State or local government to a resident 
        of such State or locality, for the purchase or installation of 
        any water conservation or efficiency measure, or
            ``(3) provided (directly or indirectly) by a storm water 
        management provider to a customer, or by a State or local 
        government to a resident of such State or locality, for the 
        purchase or installation of any storm water management 
        measure.''.
    (b) Conforming Amendments.--
            (1) Definition of water conservation or efficiency measure 
        and storm water management measure.--Section 136(c) of the 
        Internal Revenue Code of 1986 is amended--
                    (A) by striking ``Energy Conservation Measure'' in 
                the heading thereof and inserting ``Definitions'',
                    (B) by striking ``In general'' in the heading of 
                paragraph (1) and inserting ``Energy conservation 
                measure'', and
                    (C) by redesignating paragraph (2) as paragraph (4) 
                and by inserting after paragraph (1) the following:
            ``(2) Water conservation or efficiency measure.--For 
        purposes of this section, the term `water conservation or 
        efficiency measure' means any evaluation of water use, or any 
        installation or modification of property, the primary purpose 
        of which is to reduce consumption of water or to improve the 
        management of water demand with respect to one or more dwelling 
        units.
            ``(3) Storm water management measure.--For purposes of this 
        section, the term `storm water management measure' means any 
        installation or modification of property primarily designed to 
        reduce or manage amounts of storm water with respect to one or 
        more dwelling units.''.
            (2) Definition of public utility.--Section 136(c)(4) of 
        such Code (as redesignated by paragraph (1)(C)) is amended by 
        striking subparagraph (B) and inserting the following:
                    ``(B) Public utility.--The term `public utility' 
                means a person engaged in the sale of electricity, 
                natural gas, or water to residential, commercial, or 
                industrial customers for use by such customers.
                    ``(C) Storm water management provider.--The term 
                `storm water management provider' means a person 
                engaged in the provision of storm water management 
                measures to the public.
                    ``(D) Person.--For purposes of subparagraphs (B) 
                and (C), the term `person' includes the Federal 
                Government, a State or local government or any 
                political subdivision thereof, or any instrumentality 
                of any of the foregoing.''.
            (3) Clerical amendments.--
                    (A) The heading of section 136 of such Code is 
                amended--
                            (i) by inserting ``and water'' after 
                        ``energy'', and
                            (ii) by striking ``provided by public 
                        utilities''.
                    (B) The item relating to section 136 in the table 
                of sections of part III of subchapter B of chapter 1 of 
                such Code is amended--
                            (i) by inserting ``and water'' after 
                        ``energy'', and
                            (ii) by striking ``provided by public 
                        utilities''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of enactment of this 
section.
    (d) No Inference.--Nothing in this section or the amendments made 
by this section shall be construed to create any inference with respect 
to the proper tax treatment of any subsidy received directly or 
indirectly from a public utility, a storm water management provider, or 
a State or local government for any water conservation measure or storm 
water management measure before the date of the enactment of this 
section.
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