I 116TH CONGRESS 2D SESSION H. R. 8885 To provide incentives for the purchase of water-efficient products, and for other purposes. IN THE HOUSE OF REPRESENTATIVES DECEMBER 7, 2020 Mr. CARTWRIGHT (for himself, Mr. HUFFMAN, Ms. NORTON, and Mr. GRI- JALVA) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committees on Oversight and Reform, and Energy and Commerce, for a period to be subsequently de- termined 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 Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Water Advanced Tech- 4 nologies for Efficient Resource Use Act of 2020’’. 5 SEC. 2. DEFINITIONS. 6 In this Act: 7 VerDate Sep 11 2014 22:12 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H8885.IH H8885 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 8885 IH (1) ADMINISTRATOR.—The term ‘‘Adminis- 1 trator’’ means the Administrator of the Environ- 2 mental Protection Agency. 3 (2) AGENCY.—The term ‘‘agency’’ has the 4 meaning given such term in section 7902(a) of title 5 5, United States Code. 6 (3) COVERED CONSUMER.—The term ‘‘covered 7 consumer’’ means an individual served by an eligible 8 entity. 9 (4) ELIGIBLE ENTITY.—The term ‘‘eligible enti- 10 ty’’ means— 11 (A) a State, local, or Tribal government; 12 (B) a drinking water utility or wastewater 13 utility; 14 (C) a municipal water authority or a re- 15 gional water authority; or 16 (D) a nonprofit organization. 17 (5) INCENTIVE.—The term ‘‘incentive’’ in- 18 cludes— 19 (A) rebates, vouchers, and other financial 20 incentives; and 21 (B) the direct installation of a WaterSense 22 product. 23 VerDate Sep 11 2014 22:12 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H8885.IH H8885 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 8885 IH (6) NONPROFIT ORGANIZATION.—The term 1 ‘‘nonprofit organization’’ means an organization 2 that— 3 (A) is described in section 501(c)(3) of the 4 Internal Revenue Code of 1986 (26 U.S.C. 5 501(c)(3)); and 6 (B) is exempt from taxation under section 7 501(a) of such Code. 8 (7) PRODUCT.—The term ‘‘product’’ means a 9 product, building, landscape, facility, process, or 10 service. 11 (8) STATE.—The term ‘‘State’’ means each of 12 the several States of the United States, the District 13 of Columbia, Puerto Rico, the United States Virgin 14 Islands, Guam, American Samoa, and the Common- 15 wealth of the Northern Mariana Islands. 16 (9) WATERSENSE PRODUCT.—The term 17 ‘‘WaterSense product’’ means a product that is cer- 18 tified to display the WaterSense label under the 19 WaterSense program established under section 324B 20 of the Energy Policy and Conservation Act (42 21 U.S.C. 6294b). 22 SEC. 3. FEDERAL PROCUREMENT OF WATERSENSE PROD- 23 UCTS. 24 (a) PROCUREMENT.— 25 VerDate Sep 11 2014 22:12 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8885.IH H8885 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 8885 IH (1) IN GENERAL.—Except as provided in para- 1 graph (2), in procuring any water-consuming prod- 2 uct, the head of an agency shall procure a 3 WaterSense product. 4 (2) EXCEPTIONS.—Paragraph (1) does not 5 apply if— 6 (A) with respect to the type of water-con- 7 suming product being procured, the head of an 8 agency finds, in writing, that— 9 (i) no WaterSense product is cost-ef- 10 fective over the life of such type of prod- 11 uct, taking current and future water and 12 wastewater cost savings into account; or 13 (ii) no WaterSense product of such 14 type is reasonably available to meet the 15 functional requirements of the agency; or 16 (B) the water-consuming product being 17 procured is designed for use in combat or com- 18 bat-related missions. 19 (b) INSTALLATION AND MAINTENANCE.—As applica- 20 ble, the head of an agency that procures a WaterSense 21 product under subsection (a)(1) shall use a certified pro- 22 fessional (including a licensed plumber or a licensed me- 23 chanical contractor, as appropriate) to install and main- 24 tain such product. 25 VerDate Sep 11 2014 22:12 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H8885.IH H8885 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 8885 IH (c) MEASURES TO REDUCE WATER CONSUMP- 1 TION.—The head of each agency shall consider adopting 2 measures to reduce agency water consumption, including 3 such measures as the use of— 4 (1) water reuse, reclamation, or recycling tech- 5 nology; 6 (2) water leak detection technology; and 7 (3) products that— 8 (A) do not consume water; and 9 (B) perform similar functions as com- 10 parable water-consuming products. 11 (d) LISTING OF WATERSENSE PRODUCTS.—The Ad- 12 ministrator of General Services shall clearly identify and 13 prominently display, in a listing of water-consuming prod- 14 ucts, WaterSense products. 15 (e) REGULATIONS.—Not later than 180 days after 16 the date of enactment of this section, the Administrator 17 of the Environmental Protection Agency and the Director 18 of the Office of Management and Budget shall issue regu- 19 lations to carry out this section. 20 SEC. 4. INCENTIVES FOR THE PURCHASE OF WATERSENSE 21 PRODUCTS. 22 (a) ESTABLISHMENT.—The Administrator of the En- 23 vironmental Protection Agency shall establish a program 24 to provide grants to eligible entities to provide incentives 25 VerDate Sep 11 2014 03:49 Dec 19, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H8885.IH H8885 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 8885 IH to covered consumers for the purchase of a WaterSense 1 product. 2 (b) ELIGIBILITY.—To be eligible to receive a grant 3 under this section, an eligible entity shall— 4 (1) submit an application to the Administrator 5 at such time, in such form, and containing such in- 6 formation as the Administrator may require; and 7 (2) provide assurances, which the Administrator 8 determines are satisfactory, that the eligible entity 9 will use such grant to supplement, but not supplant, 10 other incentives that are available to a covered con- 11 sumer for the purchase of a WaterSense product. 12 (c) EVALUATION CRITERIA FOR APPLICATIONS.—In 13 evaluating an application submitted under subsection 14 (b)(1), the Administrator shall consider— 15 (1) the population served by the eligible entity 16 in the most recent calendar year for which data are 17 available; 18 (2) the estimated effect of providing incentives 19 to such population; 20 (3) if the eligible entity previously received a 21 grant under this section— 22 (A) the degree to which the use of such 23 grant encouraged the purchase of WaterSense 24 products; and 25 VerDate Sep 11 2014 22:12 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H8885.IH H8885 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 8885 IH (B) whether there are amounts of such 1 grant that remain unused; and 2 (4) whether the eligible entity promotes or im- 3 plements a program to recycle or manage the dis- 4 posal of any products that are replaced as a result 5 of the provision of incentives under this section. 6 (d) USE OF GRANT.— 7 (1) IN GENERAL.—An eligible entity that re- 8 ceives a grant under this section shall— 9 (A) use such grant to provide incentives to 10 covered consumers that purchase a WaterSense 11 product; or 12 (B) with approval from the Administrator, 13 provide some, or all, of such grant to another 14 eligible entity for use in accordance with sub- 15 paragraph (A). 16 (2) ADMINISTRATIVE COSTS.—Not more than 17 50 percent of each grant provided under this section 18 may be used to pay for the administrative cost of 19 providing incentives in accordance with paragraph 20 (1). 21 (3) INCENTIVE AMOUNTS.—With respect to re- 22 bates, vouchers, and other such financial incentives, 23 an eligible entity shall determine the amount to pro- 24 vide based on the following: 25 VerDate Sep 11 2014 22:12 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H8885.IH H8885 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 8885 IH (A) The amount of the grant provided to 1 the eligible entity under this section. 2 (B) The amount of any other incentives 3 that are available to a covered consumer for the 4 purchase of a WaterSense product. 5 (C) The estimated amount necessary to en- 6 courage a covered consumer to purchase a 7 WaterSense product. 8 (D) As applicable, the costs to a covered 9 consumer for onsite preparation, assembly, and 10 installation of a WaterSense product. 11 (e) AUTHORIZATION OF APPROPRIATIONS.—There 12 are authorized to be appropriated to carry out this sec- 13 tion— 14 (1) $50,000,000 for fiscal year 2021; 15 (2) $100,000,000 for fiscal year 2022; 16 (3) $150,000,000 for fiscal year 2023; 17 (4) $100,000,000 for fiscal year 2024; and 18 (5) $50,000,000 for fiscal year 2025. 19 SEC. 5. EXCLUSION FROM GROSS INCOME OF AMOUNTS RE- 20 CEIVED AS INCENTIVES FOR THE PURCHASE 21 OF WATERSENSE PRODUCTS. 22 (a) IN GENERAL.—Part III of subchapter B of chap- 23 ter 1 of the Internal Revenue Code of 1986 is amended 24 by inserting before section 140 the following new section: 25 VerDate Sep 11 2014 22:12 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H8885.IH H8885 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 8885 IH ‘‘SEC. 139I. INCENTIVES FOR THE PURCHASE OF 1 WATERSENSE PRODUCTS. 2 ‘‘(a) IN GENERAL.—In the case of an individual, 3 gross income does not include any amount received as an 4 incentive under section 3 of the Water Advanced Tech- 5 nologies for Efficient Resource Use Act of 2020. 6 ‘‘(b) DENIAL OF DOUBLE BENEFIT.— 7 ‘‘(1) DEDUCTIONS AND CREDITS.—No deduc- 8 tion or credit under this subtitle shall be allowed for 9 any expenditure with respect to which any amount 10 excluded under subsection (a) was provided. 11 ‘‘(2) BASIS ADJUSTMENT.—The adjusted basis 12 of any property with respect to which an amount ex- 13 cluded under subsection (a) is provided shall be re- 14 duced by the amount so excluded.’’. 15 (b) CONFORMING AMENDMENT.—The table of sec- 16 tions for part III of subchapter B of chapter 1 of such 17 Code is amended by inserting before the item relating to 18 section 140 the following new item: 19 ‘‘Sec. 139I. Incentives for the purchase of WaterSense products.’’. (c) EFFECTIVE DATE.—The amendments made by 20 this section shall apply to taxable years beginning after 21 the date of the enactment of this section. 22 VerDate Sep 11 2014 22:12 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H8885.IH H8885 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 8885 IH SEC. 6. MODIFICATIONS TO INCOME EXCLUSION FOR CON- 1 SERVATION SUBSIDIES. 2 (a) IN GENERAL.—Subsection (a) of section 136 of 3 the Internal Revenue Code of 1986 is amended— 4 (1) by striking ‘‘any subsidy provided’’ and in- 5 serting ‘‘any subsidy— 6 ‘‘(1) provided’’, 7 (2) by striking the period at the end and insert- 8 ing a comma, and 9 (3) by adding at the end the following new 10 paragraphs: 11 ‘‘(2) provided (directly or indirectly) by a public 12 utility to a customer, or by a State or local govern- 13 ment to a resident of such State or locality, for the 14 purchase or installation of any water conservation or 15 efficiency measure, or 16 ‘‘(3) provided (directly or indirectly) by a storm 17 water management provider to a customer, or by a 18 State or local government to a resident of such State 19 or locality, for the purchase or installation of any 20 storm water management measure.’’. 21 (b) CONFORMING AMENDMENTS.— 22 (1) DEFINITION OF WATER CONSERVATION OR 23 EFFICIENCY MEASURE AND STORM WATER MANAGE- 24 MENT MEASURE.—Section 136(c) of the Internal 25 Revenue Code of 1986 is amended— 26 VerDate Sep 11 2014 22:12 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H8885.IH H8885 pamtmann on DSKBC07HB2PROD with BILLS 11 •HR 8885 IH (A) by striking ‘‘ENERGY CONSERVATION 1 MEASURE’’ in the heading thereof and inserting 2 ‘‘DEFINITIONS’’, 3 (B) by striking ‘‘IN GENERAL’’ in the 4 heading of paragraph (1) and inserting ‘‘EN- 5 ERGY CONSERVATION MEASURE’’, and 6 (C) by redesignating paragraph (2) as 7 paragraph (4) and by inserting after paragraph 8 (1) the following: 9 ‘‘(2) WATER CONSERVATION OR EFFICIENCY 10 MEASURE.—For purposes of this section, the term 11 ‘water conservation or efficiency measure’ means any 12 evaluation of water use, or any installation or modi- 13 fication of property, the primary purpose of which is 14 to reduce consumption of water or to improve the 15 management of water demand with respect to one or 16 more dwelling units. 17 ‘‘(3) STORM WATER MANAGEMENT MEASURE.— 18 For purposes of this section, the term ‘storm water 19 management measure’ means any installation or 20 modification of property primarily designed to re- 21 duce or manage amounts of storm water with re- 22 spect to one or more dwelling units.’’. 23 (2) DEFINITION OF PUBLIC UTILITY.—Section 24 136(c)(4) of such Code (as redesignated by para- 25 VerDate Sep 11 2014 22:12 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H8885.IH H8885 pamtmann on DSKBC07HB2PROD with BILLS 12 •HR 8885 IH graph (1)(C)) is amended by striking subparagraph 1 (B) and inserting the following: 2 ‘‘(B) PUBLIC UTILITY.—The term ‘public 3 utility’ means a person engaged in the sale of 4 electricity, natural gas, or water to residential, 5 commercial, or industrial customers for use by 6 such customers. 7 ‘‘(C) STORM WATER MANAGEMENT PRO- 8 VIDER.—The term ‘storm water management 9 provider’ means a person engaged in the provi- 10 sion of storm water management measures to 11 the public. 12 ‘‘(D) PERSON.—For purposes of subpara- 13 graphs (B) and (C), the term ‘person’ includes 14 the Federal Government, a State or local gov- 15 ernment or any political subdivision thereof, or 16 any instrumentality of any of the foregoing.’’. 17 (3) CLERICAL AMENDMENTS.— 18 (A) The heading of section 136 of such 19 Code is amended— 20 (i) by inserting ‘‘AND WATER’’ after 21 ‘‘ENERGY’’, and 22 (ii) by striking ‘‘PROVIDED BY PUB- 23 LIC UTILITIES’’. 24 VerDate Sep 11 2014 22:12 Dec 15, 2020 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H8885.IH H8885 pamtmann on DSKBC07HB2PROD with BILLS 13 •HR 8885 IH (B) The item relating to section 136 in the 1 table of sections of part III of subchapter B of 2 chapter 1 of such Code is amended— 3 (i) by inserting ‘‘and water’’ after 4 ‘‘energy’’, and 5 (ii) by str [Text truncated for display. Full text available on Congress.gov.]