Financing Lead Out of Water Act of 2025

This bill changes tax rules so cities and water utilities can use bond money to replace the private-side part of lead water lines without running into “private use” limits. In simple terms, it makes it easier to spend public bond funds to swap out the piece of a lead pipe that sits on a homeowner’s property, when doing so helps meet federal drinking water rules for lead. This aims to speed up lead pipe replacement and protect families’ health by getting lead out of tap water sooner .

It defines what counts as a lead service line and limits the funding to work that helps a public water system follow national lead standards. The change applies to bonds issued after December 31, 2025 .

• Key points:
  • Who is affected: Public water systems and households with lead service lines connected to those systems .
  • What changes: Using bond proceeds to replace the privately owned portion of a lead service line will not count as private business use, if it helps meet national lead drinking water rules .
  • When it starts: For obligations (bonds) issued after December 31, 2025 .