HR 2940
Advancing Water Reuse Act
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Bill overview
This bill, the Advancing Water Reuse Act, creates a tax credit for investments in certain water reuse projects. Specifically, it allows taxpayers to claim a 30% credit for qualified investments made in projects like onsite water recycling systems, replacing freshwater with recycled water, or expanding municipal water recycling systems. The credit applies to tangible property used in these projects and includes provisions for transfers of property to utilities.
Key provisions
- Provides a 30% tax credit for qualified investments in water reuse projects.
- Defines ‘qualified water reuse project’ as installations, replacements, or modifications of onsite systems, freshwater replacement, or municipal system expansions.
- ‘Qualified investment’ includes property constructed, reconstructed, or acquired by the taxpayer.
- Includes a special rule for property transferred to utilities, treating the transferor as eligible for the credit.
- Sets a termination date for the credit, with applications not eligible after December 31, 2032.
- Modifies section 46 of the Internal Revenue Code to include the qualifying water reuse project credit.
- Clarifies rules regarding depreciation and amortization for qualified property.
- Establishes a process for determining the basis of property transferred to utilities.
Who is affected
- Businesses (industrial, manufacturing, data centers, food processing facilities)
- Utilities
- Taxpayers
- Municipalities
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119th CONGRESS — 1st Session
H. R. 2940
IN THE HOUSE OF REPRESENTATIVES
A BILL
To amend the Internal Revenue Code of 1986 to allow an investment credit for certain water reuse projects.
This Act may be cited as the Advancing Water Reuse Act
.
For purposes of this subsection, the term qualified property
means property—
which is tangible property,
with respect to which depreciation (or amortization in lieu of depreciation) is allowable, and
which is—
constructed, reconstructed, or erected by the taxpayer, or
acquired by the taxpayer if the original use of such property commences with the taxpayer.
For purposes of this section, the term qualifying water reuse project
means a project which—
replaces the use of freshwater, such as groundwater, with recycled water from a municipal water provider for the production of goods or provision of services, or
builds or expands a municipal water recycling system for the purpose of securing recycled water for the production of goods or provision of services.
In the case of any qualified transfer property transferred from a person to a utility—
such property shall be treated as qualified property with respect to such person,
such person shall be treated as having placed such property in service at the time of such transfer,
the basis of such person in such property which is taken into account under subsection (b)(1) shall be the basis of such person in such property at the time of such transfer, and
such property shall not be taken into account for purposes of determining any credit allowed under this section to such utility.
For purposes of this subsection, the term qualified transfer property
means property transferred from a person to a utility if—
such property is qualified property with respect to such utility, and
such person and such utility enter into a binding written agreement under which such person is treated as eligible for the credit allowed under this section with respect to such property in lieu of such utility.
This section shall not apply to any property the construction of which begins after December 31, 2032.
Section 46 of such Code is amended by striking and
at the end of paragraph (6), by striking the period at the end of paragraph (7) and inserting , and
, and by adding at the end the following new paragraph:
The amendments made by this section shall apply to periods after the date of the enactment of this section under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the date of the enactment of the Revenue Reconciliation Act of 1990).