Status:
No progress. Last legislative action: Referred to the House Committee on Ways and Means on April 17, 2025.
Date of Status:
Last Verified July 14, 2026.
Purpose:
H.R. 2940 amends the Internal Revenue Code of 1986 to create a 30% federal investment tax credit for qualifying water reuse projects. Eligible projects include onsite industrial water recycling systems, use of recycled municipal water in place of freshwater, and expansion of municipal reuse infrastructure.
The credit applies to investments placed in service before December 31, 2032 and includes provisions allowing eligibility for assets transferred to utilities under binding agreements.
Impact on Water Industry:
The bill could reduce upfront costs for water reuse and recycling infrastructure, improving project feasibility for industrial and municipal users. It may increase adoption of recycled water systems and reduce demand on freshwater supplies, particularly in water-stressed regions. It also supports public–private investment structures by allowing credit transfer arrangements with utilities. Final impacts remain uncertain while the bill is still in committee and subject to further definition through implementation guidance.
Funding:
No direct appropriations are provided. The bill establishes a 30% nonrefundable investment tax credit, creating a federal tax expenditure dependent on project uptake through 2032.
