Who is affected and how:

• Public water systems and local governments: Benefit most directly. The change makes it simpler and more certain for state and local issuers and water system owners to use certain tax-preferred obligations to finance replacement of privately owned sections of lead service lines without that activity being counted as private business use. This can lower borrowing costs and reduce structuring complexity.

• Property owners with privately owned lead service line segments: Indirect benefit. When public issuers can finance replacement more easily, property owners may see faster or more affordable LSL replacement on their properties, reducing exposure to lead in drinking water.

• Municipal bond market participants (issuers, underwriters, bond counsel, investors): Will need to apply the new definitions and Safe Drinking Water Act cross-references when structuring and underwriting relevant obligations; issuers may issue more bonds for LSL replacement under favorable tax treatment.

• Contractors and suppliers for LSL replacement: Potentially increased demand for replacement work as financing becomes more accessible.

• Federal budget/tax administration: The change alters tax treatment (a revenue/tax code effect) by preserving tax-preferred status for a class of financings; any revenue impact is likely modest and indirect (via changes in issuance behavior), not an appropriation.

No direct federal spending or grant mandate is created. The provision does not impose new obligations on states or localities beyond existing infrastructure responsibilities; it merely clarifies tax treatment for a specific financing activity and relies on existing Safe Drinking Water Act definitions for technical scope.