Flow Act

HR 3892, the Flow Act, clarifies that replacing privately-owned lead service lines connected to public water systems does not count as "private business use" under federal tax law. This change directly affects public water systems and issuers of tax-exempt bonds by allowing them to use bond proceeds for lead pipe replacement without disqualifying the bonds from tax-exempt status. The bill specifies that funds used to replace lead service lines to comply with federal lead regulations (as defined in the Safe Drinking Water Act) qualify for this tax treatment. The provision applies to bonds issued after December 31, 2025, facilitating future financing for lead pipe removal projects.