Advancing Water Reuse Act

Tax credit for businesses that reuse water

If enacted, this bill would create a new investment tax credit equal to 30% of a taxpayer’s qualified investment in a qualifying water reuse project. Qualified investment means the basis of tangible property that is depreciable and placed in service by the taxpayer as part of the project. Eligible projects would include onsite recycling systems in industrial, manufacturing, data center, or food processing facilities; replacing freshwater with municipal recycled water for production or services; and building or expanding municipal water recycling systems. The credit would only apply to projects whose construction begins after enactment and only if the project is placed in service within 10 years after enactment. If a person transfers qualifying property to a utility under a binding written agreement, the transferor could be treated as having placed the property in service at transfer and use its basis to claim the credit while the utility could not also claim a credit for that property.