Water Affordability, Transparency, Equity, and Reliability Act of 2025
- Sponsor
- Rep. Watson Coleman, Bonnie [D-NJ-12]
- Committees
- Transportation and Infrastructure Committee (primary)
- Last action
- May 13, 2025
Bottom line
The bill seeks to provide dedicated, substantial federal funding for water and sewer infrastructure, workforce development, and equity initiatives, financed by an increase in the corporate income tax rate.
What it actually does
This bill establishes the Water Affordability, Transparency, Equity, and Reliability (WATER) Trust Fund in the U.S. Treasury, funded by an increase in the corporate tax rate from 21% to 24.5%. The trust fund's monies are then allocated to various federal water and sewer infrastructure programs, including Clean Water and Drinking Water State Revolving Funds, household well systems, colonias, Indian Health Services, and water operator job training. It also mandates an EPA study on water affordability and discrimination, and includes labor provisions such as project labor agreements.
Proponents argue
Supporters argue that the bill provides desperately needed, long-term funding to address America's aging water infrastructure, which is critical for public health, environmental protection, and economic development. They contend that the corporate tax increase ensures that large corporations contribute their fair share to essential public services, while provisions promoting affordability, equity, and job training ensure that investments benefit all communities, particularly underserved ones.
Opponents contend
Critics contend that increasing the corporate tax rate could harm U.S. economic competitiveness, discourage investment, and lead to job losses. They may also argue that the bill represents federal overreach into local water management, imposes burdensome labor requirements, and could lead to inefficient allocation of funds or politicization of water services.
The bill is moderately complex due to its amendments to existing law and creation of a new trust fund, but an informed reader can understand its core provisions within a reasonable timeframe.
Sec. 2(a), (b)
Establishment of WATER Trust Fund and Corporate Tax Rate Increase
This provision establishes the 'Water Affordability, Transparency, Equity, and Reliability Trust Fund' in the U.S. Treasury. To fund this, it increases the corporate income tax rate from 21% to 24.5% for taxable years beginning after December 31, 2024. The amount appropriated to the trust fund annually is capped at the larger of $35 billion or one-twentieth of the 20-year identified need for water infrastructure by the EPA.
Supporters argue
Supporters argue that this dedicated funding mechanism provides a stable and substantial source of investment for critical water infrastructure, addressing a long-standing national need. They contend that the corporate tax increase ensures that profitable corporations contribute to the public good, aligning with principles of tax fairness.
Critics contend
Critics argue that raising the corporate tax rate could make the U.S. less competitive globally, discourage domestic investment, and potentially lead to higher prices for consumers or reduced wages for workers. They may also question the efficiency of a new trust fund versus existing appropriations processes.
Tradeoffs
The provision balances the need for significant infrastructure investment against concerns about the economic impact of higher corporate taxes. It also creates a dedicated funding stream, which offers stability but potentially reduces congressional flexibility in budget allocation.
Sec. 2(c)
Allocation of WATER Trust Fund Monies
This section details how the funds from the newly established WATER Trust Fund will be distributed among various federal agencies and programs. Key allocations include 42% each to the Clean Water State Revolving Funds (CWSRF) and the Drinking Water State Revolving Funds (DWSRF), with smaller percentages directed to specific grant programs for technical assistance, school drinking water, household water wells, colonias, Indian Health Services, and water operator job training.
Sec. 3
EPA Study and Report on Water Services
This section mandates that the Administrator of the Environmental Protection Agency (EPA) conduct a comprehensive study on various aspects of water and sewer services. The study must cover water affordability nationwide, including rates, disconnections, and the effectiveness of federal funding. It also requires collaboration with the Department of Justice's Civil Rights Division to study discriminatory practices by service providers and state program administrators, and violations of civil rights regarding equal access. Furthermore, the study will evaluate public participation in regionalization efforts and collect data on people without services, disconnections affecting vulnerable populations, tax liens due to unpaid charges, and disparate impacts based on race, gender, or socioeconomic status. A report with findings and recommendations must be submitted to Congress within one year.
Sec. 5(a)(4)
Prohibition on CWSRF Funding for New Communities
This provision amends the Federal Water Pollution Control Act to prohibit states from using Clean Water State Revolving Fund (CWSRF) monies to provide financial assistance for projects that would substantially benefit new communities, lots, or subdivisions. An exception is made for projects constructing advanced decentralized wastewater systems.
Sec. 5(b)
CWSRF Eligibility for Public Acquisition of Private Systems
This provision expands the eligible uses of Clean Water State Revolving Fund (CWSRF) assistance. It allows municipalities and state agencies to use funds for purchasing privately owned treatment works, whether from a willing or unwilling seller. Additionally, funds can be used to cover expenses related to canceling contracts for the operation or management of publicly owned treatment works.
Sec. 5(c)
Increased CWSRF Subsidization Requirement
This provision amends the Federal Water Pollution Control Act to significantly increase the amount of additional subsidization states must provide from their Clean Water State Revolving Fund (CWSRF) capitalization grants. It requires states to use not less than 50 percent of their total annual capitalization grant for additional subsidization (e.g., principal forgiveness, negative interest loans), up from a previous limit of 30 percent.
Sec. 6(a)(1)
DWSRF Requirement for Publicly Owned, Operated, and Managed Systems
This provision amends the Safe Drinking Water Act to specify that financial assistance from the Drinking Water State Revolving Fund (DWSRF) is primarily available only to 'publicly owned, operated, and managed' community water systems. This clarifies and reinforces a preference for public control over drinking water infrastructure when utilizing federal funds.
Sec. 6(a)(2)
DWSRF Exception for Small Water Systems
This provision creates an exception to the general requirement that Drinking Water State Revolving Fund (DWSRF) assistance only goes to publicly owned, operated, and managed systems. It allows public water systems that regularly serve fewer than 10,000 persons, and are not owned, operated, or managed by any entity that manages other public water systems, to receive DWSRF assistance regardless of their ownership structure.
Sec. 6(a)(1)(ii)
DWSRF Eligibility for Public Acquisition of Private Systems
This provision expands the eligible uses of Drinking Water State Revolving Fund (DWSRF) assistance. It explicitly allows funds to be used for purchasing privately owned community water systems from a willing or unwilling seller. Additionally, it permits the use of funds to cover expenses related to canceling contracts for the operation or management of a community water system.
Sec. 6(g)(3)(D)
DWSRF Guidance on Affordability, Equity, and Service Disconnection Protections
This provision adds a new requirement to the Safe Drinking Water Act, mandating that the EPA provide guidance to states on how to ensure affordable, equitable, transparent, and reliable water service. This guidance must also include protections for households facing service disconnection due to unpaid water service charges and promote universal equal access to water services.
Sec. 6(k)(1)(E)-(G)
DWSRF Grants for Lead Service Line Replacement, PFAS Contamination, and Household Well Filtration
This provision expands the eligible uses of Drinking Water State Revolving Fund (DWSRF) assistance to include specific grant programs. It allows grants to publicly owned systems for replacing lead service lines on public or private property at no cost to property owners. It also provides grants to publicly owned systems for updating treatment plants or switching water sources due to contamination from perfluoroalkyl or polyfluoroalkyl substances (PFAS). Finally, it offers grants to owners of household water wells contaminated by PFAS for purchasing and installing filtration systems.
Sec. 8(b)
Project Labor Agreements for CWSRF and DWSRF Projects
This provision amends both the Federal Water Pollution Control Act and the Safe Drinking Water Act to include new labor requirements for projects funded through the Clean Water State Revolving Fund (CWSRF) and Drinking Water State Revolving Fund (DWSRF). States must permit recipients of this assistance to enter into 'project labor agreements' (PLAs) and, to the maximum extent practicable, ensure that such projects are carried out using these agreements. PLAs are pre-hire collective bargaining agreements that establish terms and conditions of employment for a specific construction project.
Sec. 9
Water Operator Jobs Training Grants Program
This section establishes a new competitive grant program, administered by the Secretary of Labor, to provide job training (including pre-apprenticeships and apprenticeships) and related activities for workers in the drinking water, wastewater (including stormwater), and related sectors. The program prioritizes funding for low- and very low-income persons, particularly those residing in high-poverty, high-unemployment areas, communities of color, or Tribal and indigenous communities, or members of labor unions representing these individuals.
Prohibits the use of any funds allocated from the WATER Trust Fund for activities described in paragraphs (1) through (5) of section 203(a) of the Labor-Management Reporting and Disclosure Act of 1959.
Sec. 2(d)
Why it matters:This is a standard legislative practice to include specific prohibitions or limitations at the end of a funding section. It is likely intended to prevent funds from being used for certain labor-related activities, such as employer-funded persuasion campaigns against union organizing.
Case for: Supporters would argue this provision prevents federal funds from being used to undermine workers' rights to organize or engage in collective bargaining, ensuring that public money supports fair labor practices.
Case against: Critics might argue that this provision is overly restrictive and could limit legitimate employer communications or activities, potentially infringing on free speech or due process rights for entities receiving federal funds.
Estimated impact: Prevents an unspecified amount of federal funds from being used for certain labor-management activities, potentially shifting resources towards other allowable uses or requiring entities to use non-federal funds for such activities.
Significantly increases the authorized appropriations for two existing programs: the Household Water Well Systems grant program (from $20,000,000 to $348,500,000 annually) and the Drinking Water Assistance to Colonias program (from $25,000,000 to $100,000,000 annually for fiscal years 2025-2029).
Sec. 4 and Sec. 10
Why it matters:This is a common legislative technique to update funding levels for established programs without creating entirely new statutory frameworks. While not intentionally evasive, the technical nature of amending existing law can obscure the magnitude of the funding increase.
Case for: Supporters would argue that these substantial increases are necessary to address critical needs in rural areas and colonias, where access to safe and reliable drinking water and well systems is often severely lacking. The increased funding reflects a recognition of the scale of the problem.
Case against: Critics might question the justification for such large increases in specific programs without a detailed needs assessment or cost-benefit analysis presented alongside the bill. They might argue for a more comprehensive review of all water programs before such significant boosts.
Estimated impact: Increases annual authorization for Household Water Well Systems by over $328 million and for Colonias assistance by $75 million per year for five years, representing a significant federal commitment to these specific areas.
Amends the Safe Drinking Water Act to change the requirement for Drinking Water State Revolving Fund (DWSRF) subsidies. Previously, states 'may not exceed 30 percent' of their capitalization grant for subsidies. This bill changes it to 'may not be less than 50 percent' of the capitalization grant.
Sec. 6(d)(2)
Why it matters:This is a technical amendment to an existing funding mechanism. While the change is substantial, the legislative drafting style for such amendments often involves precise legal language that can obscure the policy shift from a quick read.
Case for: Supporters would argue that this change ensures a greater portion of federal DWSRF funds directly benefits disadvantaged communities through principal forgiveness or other subsidies, making essential drinking water projects more affordable and accessible for those most in need.
Case against: Critics might contend that mandating a higher minimum subsidization rate reduces the revolving nature of the fund, potentially limiting the number of projects that can be supported over the long term as less money is repaid. It could also strain state SRF programs that rely on repayments for future lending.
Estimated impact: Requires states to allocate at least 50% of their DWSRF capitalization grants as subsidies, a significant increase from the previous maximum of 30%. This could mean hundreds of millions to billions of dollars more in direct financial assistance annually for eligible communities.