I 

118TH CONGRESS 

1ST SESSION H. R. 5325 

To amend the Internal Revenue Code of 1986 to impose an excise tax 

on water use during droughts, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 1, 2023 

Mr. GALLEGO (for himself and Mr. GRIJALVA) introduced the following bill; 

which was referred to the Committee on Ways and Means, and in addition to the Committee on Natural Resources, for a period to be subsequently determined by the Speaker, in each case for consideration of such 

provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Internal Revenue Code of 1986 to impose 

an excise tax on water use during droughts, and for 

other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Domestic Water Pro5 tection Act of 2023’’. 


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1 SEC. 2. EXCISE TAX ON GROWTH OF CERTAIN WATER-IN2 TENSIVE CROPS. 

3 (a) IN GENERAL.—Subchapter D of chapter 32 of the 

4 Internal Revenue Code of 1986 is amended by inserting 

5 after part I the following new part: 

6 ‘‘PART II—WATER-INTENSIVE CROPS 

‘‘Sec. 4171. Imposition of tax. 

‘‘Sec. 4172. Definitions. 

‘‘Sec. 4173. Special rules. 

7 ‘‘SEC. 4171. IMPOSITION OF TAX. 

8 ‘‘(a) IN GENERAL.—There is hereby imposed a tax 

9 on the sale of any specified water intensive crop by the 

10 manufacturer, producer, or exporter thereof a tax of 300 

11 percent of the price for which so sold. 

12 ‘‘(b) PERSONS LIABLE FOR TAX.—The manufac13 turer, producer, or exporter referred to in subsection (a) 

14 shall be liable for the tax imposed by such subsection. 

15 ‘‘(c) REGULATIONS.—The Secretary shall promulgate 

16 regulations for application of this section in a manner con17 sistent with international trade agreements. 

18 ‘‘SEC. 4172. DEFINITIONS. 

19 ‘‘(a) WATER-INTENSIVE CROP.—For purposes of this 

20 part— 

21 ‘‘(1) IN GENERAL.—The term ‘water-intensive 

22 crop’ means a crop grown— 

23 ‘‘(A) in an area experiencing prolonged 

24 drought at the time such crop is grown, and 


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1 ‘‘(B) by a manufacturer, producer, or ex2 porter which is a nonresident alien individual, 

3 foreign corporation, foreign government, or for4 eign trust. 

5 ‘‘(b) AREA EXPERIENCING PROLONGED

6 DROUGHT.—The term ‘area experiencing prolonged 

7 drought’ means an area which has been identified by the 

8 United States Drought Monitor as experiencing severe, ex9 treme, or exceptional drought lasting more than 6 months. 

10 ‘‘SEC. 4173. SPECIAL RULES. 

11 ‘‘In the case of any water-intensive crop which is 

12 manufactured or produced by including one or more other 

13 water-intensive crops, no tax shall be imposed under this 

14 section on any water-intensive crop contained in the re15 sulting specified water-intensive crop if tax was previously 

16 imposed under this section on such water-intensive crop 

17 when contained in the water-intensive crop so included.’’. 

18 (b) DROUGHT TRUST FUND.— 

19 (1) IN GENERAL.—Subchapter A of chapter 98 

20 of the Internal Revenue Code of 1986 is amended by 

21 adding at the end the following new section: 

22 ‘‘SEC. 9512. DROUGHT TRUST FUND. 

23 ‘‘(a) CREATION OF TRUST FUND.—There is estab24 lished in the Treasury of the United States a trust fund 

25 to be known as the ‘Drought Trust Fund’, consisting of 


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1 such amounts as may be appropriated or credited to such 

2 fund as provided in this section or section 9602(b). 

3 ‘‘(b) TRANSFERS TO TRUST FUND.—There are here4 by appropriated to the Drought Trust Fund amounts 

5 equivalent to the taxes received in the Treasury under sec6 tion 4171(a). 

7 ‘‘(c) EXPENDITURES.—Amounts in the Drought 

8 Trust Fund shall be available, as provided in appropria9 tion Acts, for making expenditures to carry out the pur10 poses of the WaterSmart Drought Response Program es11 tablished under section 9504 of the Omnibus Public Land 

12 Management Act of 2009.’’. 

13 (c) CONFORMING AMENDMENTS.— 

14 (1) Section 4221(a) of such Code is amended 

15 by adding at the end the following: ‘‘Paragraphs (1), 

16 (4), (5), and (6) shall not apply to the tax imposed 

17 under section 4171.’’. 

18 (2) The table of parts for subchapter D of 

19 chapter 32 of such Code is amended by inserting 

20 after the item relating to part I the following new 

21 item: 

22 ‘‘Part II. Water-intensive crops.’’. 

23 (3) The table of sections for subchapter A of 

24 chapter 98 of the Internal Revenue Code of 1986 is 


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1 amended by adding at the end the following new 

2 item: 

‘‘Sec. 9512. Drought Trust Fund.’’. 

3 (d) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to sales after the date of the enact5 ment of this Act. 

Æ 


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