S. 2007 — Financing Lead Out of Water Act of 2025

This section excludes qualified lead service line replacement use from constituting private business use for purposes of tax-exempt governmental bond rules under IRC §141(b)(6). (Qualified lead service line replacement use means the use of bond proceeds by a public water system—as defined in the Safe Drinking Water Act—to replace any privately owned portion of a lead service line to comply with the national primary drinking water regulation for lead under that Act.) The provision applies to obligations issued after December 31, 2025. (Thus, state and local governments may finance such replacements without those uses counting toward the private business use limit, which generally restricts private benefits to preserve tax-exempt status.)