H.R. 3376 — Water Affordability, Transparency, Equity, and Reliability Act of 2025

This section cites the Act as the “Water Affordability, Transparency, Equity, and Reliability Act of 2025” and includes a table of contents.

This section establishes the Water Affordability, Transparency, Equity, and Reliability Trust Fund in the Treasury to fund water infrastructure programs, with amounts appropriated equal to revenue increases from raising the corporate income tax rate to 24.5 percent (from 21 percent) for taxable years beginning after December 31, 2024, capped annually at the larger of $35 billion or one-twentieth of the combined 20-year needs for drinking water and clean water infrastructure identified in the most recent EPA assessments under the Safe Drinking Water Act (SDWA) and Federal Water Pollution Control Act (CWA). The section directs allocation of available funds at the beginning of each fiscal year as follows: (1) 49 percent to the EPA Administrator for CWA grants, including 42 percent for Clean Water State Revolving Fund (SRF) capitalization grants; (2) 46 percent to the EPA for SDWA programs, including 42 percent for Drinking Water SRF capitalization grants; (3) 1 percent to the Secretary of Agriculture for household water well grants; (4) 0.5 percent to the Secretary of Agriculture for colonias water grants; (5) 3 percent to the Secretary of Health and Human Services, acting through the Indian Health Service (IHS), for planning, design, construction, etc., of sanitation facilities (As background: the IHS sanitation facilities program under the Indian Health Care Improvement Act provides water supply, wastewater, and solid waste systems to address health disparities in American Indian and Alaska Native communities.); and (6) 0.5 percent to the Secretary of Labor for water operator job training grants. Funds allocated under this section may not be used for specified labor-management reporting and disclosure activities.

This section directs the EPA Administrator to conduct a study on water and sewer services that examines (1) nationwide water affordability, including rates and 10-year rate increases, water service disconnections due to unpaid charges, and the effectiveness of funding under SDWA §1452 (i.e., Drinking Water State Revolving Fund) and CWA §601 (i.e., Clean Water State Revolving Fund); (2) discriminatory practices and title VI civil rights violations by water/sewer providers and state program administrators, in collaboration with the DOJ Civil Rights Division; (3) public participation in decisions to regionalize public water systems and in the governance of regionalized entities; and (4) data on populations without services, disconnections affecting vulnerable groups, tax liens/foreclosures due to unpaid charges, and disparate impacts by race, gender, or socioeconomic status. The Administrator must submit a report to Congress on the study results and recommendations for utilities, federal agencies, and states not later than one year after enactment.

This section increases the authorization of appropriations for the household water well assistance program to $348.5 million for each fiscal year (from $20 million for each of FY2019 through FY2023). The program provides grants to private nonprofit organizations to make 1% interest loans (up to 20 years) and subgrants (up to $15,000 per system) to low-income rural households (i.e., up to 60% of state median nonmetropolitan income) for constructing, refurbishing, or servicing individual household water well and decentralized wastewater systems.

This section modifies requirements for the Clean Water State Revolving Fund (CWSRF) program, which provides federal capitalization grants to states for low-interest loans and grants to municipalities for wastewater infrastructure and water quality projects, as follows: (1) bases the required state match on 20% of FY2021 capitalization grants received (instead of 20% of all future grants); (2) prohibits financial assistance from the fund for projects providing substantial direct benefits to new communities, lots, or subdivisions, except for advanced decentralized wastewater systems; (3) adds as eligible activities purchasing (from willing or unwilling sellers) privately owned treatment works and expenses to cancel contracts for operating or managing publicly owned treatment works; and (4) requires states to use at least 50% of annual capitalization grants for additional subsidization such as loan forgiveness or negative-interest loans (from up to 30%).

This section revises the drinking water State revolving fund (DWSRF) program, which provides federal capitalization grants to states for loans and other assistance to public water systems to ensure safe drinking water compliance and infrastructure improvements. Specifically, the section (1) limits eligibility under subsection (a)(2)(A) to publicly owned, operated, and managed community water systems and revises subsection (a)(2)(E) to authorize funds for purchasing privately owned community water systems from willing or unwilling sellers or for expenses related to canceling operation or management contracts (replacing prior prohibition on real property acquisition except when integral to authorized projects from willing sellers); adds subsection (a)(6) excepting public water systems regularly serving fewer than 10,000 persons that are not owned, operated, or managed by any person owning, operating, or managing other public water systems; (2) revises subsection (d)(2) to require states to provide loan subsidies using at least 50% of capitalization grants for disadvantaged communities identified in subsection (d)(1), to the extent of sufficient applications; (3) in subsection (e), bases the specified reserve amount on the state's fiscal year 2021 capitalization grant (previously, grants to be made to the state); (4) in subsection (g)(3), adds a state requirement to issue guidance ensuring affordable, equitable, transparent, and reliable water service; protections for households facing disconnection due to unpaid charges; and promotion of universal equal access to water services; and (5) in subsection (k)(1), authorizes new uses including (E) grants to publicly owned, operated, and managed community water systems to replace lead service lines on private or public property with lead-free copper lines at no cost to owners; (F) assistance to such systems for treatment plant updates or water source switches due to contamination from perfluoroalkyl or polyfluoroalkyl substances (PFAS) with at least one fully fluorinated carbon atom; and (G) grants to owners of contaminated household water wells for PFAS filtration systems.

This section revises the school drinking water grant program by broadening it to address all school drinking water infrastructure (from pre-1988 fountains), authorizing funds for installing, repairing, or replacing lead-free fountains, coolers, and bottle-filling stations as well as for lead monitoring and reporting, and increasing total funding to $1.05 billion through 2027 (from $5 million through 2021). (As background, the program provides grants to local educational agencies and early childhood programs to test for and remediate lead contamination in school drinking water.) It also increases the set-aside for grants to Indian tribes in the Drinking Water State Revolving Fund program—which provides subsidized loans and grants to public water systems for infrastructure improvements needed to comply with Safe Drinking Water Act standards—to 3 percent of funds (from 1½ percent) and makes the set-aside mandatory.

This section preserves the applicability of existing prevailing wage requirements (i.e., Davis-Bacon Act standards under 33 U.S.C. 1372, 1382(b)(6), and 42 U.S.C. 300j-9(e)) to projects funded through the Clean Water State Revolving Fund (CWSRF) program—which supports municipal wastewater infrastructure—and the Drinking Water State Revolving Fund (DWSRF) program—which supports public water system improvements. It further amends the CWSRF program (33 U.S.C. 1382(b)) to require states to (1) permit assistance recipients to enter into project labor agreements (PLAs, i.e., pre-hire collective bargaining agreements under section 8(f) of the National Labor Relations Act) for construction projects and (2) ensure, to the maximum extent practicable, that recipients use PLAs for such projects. It also amends the DWSRF program (42 U.S.C. 300j-12) to require states to (1) permit assistance recipients to enter into PLAs for construction projects as a condition of capitalization grant agreements and (2) certify in their intended use plans that construction projects will be carried out using PLAs.

This section directs the Secretary of Labor, not later than one year after enactment, to award competitive grants to eligible entities—including local and state governments, nonprofits, labor unions, community colleges, minority-serving institutions, and workforce boards—for job training (including pre-apprenticeships and apprenticeships registered under the National Apprenticeship Act) and related activities, coordinated with the public workforce investment system, to help workers obtain or upgrade employment in drinking water, wastewater (including stormwater), and related sectors. At least 50% of grant funds must prioritize low- and very low-income persons (as defined in the United States Housing Act of 1937) in high-poverty or high-unemployment ZIP codes, metropolitan or nonmetropolitan areas, environmentally disadvantaged communities (including those with significant communities of color, low-income, or Tribal and indigenous populations), or related union members; no matching funds are required; and grantees must report on employment outcomes (e.g., entry into employment, retention, and earnings increases) consistent with other Labor Department programs.

This section revises the drinking water grant program for colonias (i.e., underserved communities along the U.S.-Mexico border lacking basic sanitation services) as follows: (1) expands eligibility by defining and substituting "covered entity" to include border states and local governments with jurisdiction over eligible communities; (2) strikes subsection (d); and (3) reauthorizes and increases the annual authorization of appropriations to $100 million (from $25 million) for FY2025 through FY2029 (from FY1997 through FY1999).