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 addi-
tion to the Committee on Natural Resources, for a period to be subse-
quently 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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Domestic Water Pro-
tection Act of 2023’’. 
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SEC. 2. EXCISE TAX ON GROWTH OF CERTAIN WATER-IN-
TENSIVE CROPS. 
(a) IN GENERAL.—Subchapter D of chapter 32 of the 
Internal Revenue Code of 1986 is amended by inserting 
after part I the following new part: 
‘‘PART II—WATER-INTENSIVE CROPS 
‘‘Sec. 4171. Imposition of tax. 
‘‘Sec. 4172. Definitions. 
‘‘Sec. 4173. Special rules. 
‘‘SEC. 4171. IMPOSITION OF TAX. 
‘‘(a) IN GENERAL.—There is hereby imposed a tax 
on the sale of any specified water intensive crop by the 
manufacturer, producer, or exporter thereof a tax of 300 
percent of the price for which so sold. 
‘‘(b) PERSONS LIABLE
FOR TAX.—The manufac-
turer, producer, or exporter referred to in subsection (a) 
shall be liable for the tax imposed by such subsection. 
‘‘(c) REGULATIONS.—The Secretary shall promulgate 
regulations for application of this section in a manner con-
sistent with international trade agreements. 
‘‘SEC. 4172. DEFINITIONS. 
‘‘(a) WATER-INTENSIVE CROP.—For purposes of this 
part— 
‘‘(1) IN GENERAL.—The term ‘water-intensive 
crop’ means a crop grown— 
‘‘(A) in an area experiencing prolonged 
drought at the time such crop is grown, and 
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‘‘(B) by a manufacturer, producer, or ex-
porter which is a nonresident alien individual, 
foreign corporation, foreign government, or for-
eign trust. 
‘‘(b) 
AREA
EXPERIENCING
PROLONGED 
DROUGHT.—The term ‘area experiencing prolonged 
drought’ means an area which has been identified by the 
United States Drought Monitor as experiencing severe, ex-
treme, or exceptional drought lasting more than 6 months. 
‘‘SEC. 4173. SPECIAL RULES. 
‘‘In the case of any water-intensive crop which is 
manufactured or produced by including one or more other 
water-intensive crops, no tax shall be imposed under this 
section on any water-intensive crop contained in the re-
sulting specified water-intensive crop if tax was previously 
imposed under this section on such water-intensive crop 
when contained in the water-intensive crop so included.’’. 
(b) DROUGHT TRUST FUND.— 
(1) IN GENERAL.—Subchapter A of chapter 98 
of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new section: 
‘‘SEC. 9512. DROUGHT TRUST FUND. 
‘‘(a) CREATION OF TRUST FUND.—There is estab-
lished in the Treasury of the United States a trust fund 
to be known as the ‘Drought Trust Fund’, consisting of 
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such amounts as may be appropriated or credited to such 
fund as provided in this section or section 9602(b). 
‘‘(b) TRANSFERS TO TRUST FUND.—There are here-
by appropriated to the Drought Trust Fund amounts 
equivalent to the taxes received in the Treasury under sec-
tion 4171(a). 
‘‘(c) EXPENDITURES.—Amounts in the Drought 
Trust Fund shall be available, as provided in appropria-
tion Acts, for making expenditures to carry out the pur-
poses of the WaterSmart Drought Response Program es-
tablished under section 9504 of the Omnibus Public Land 
Management Act of 2009.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 4221(a) of such Code is amended 
by adding at the end the following: ‘‘Paragraphs (1), 
(4), (5), and (6) shall not apply to the tax imposed 
under section 4171.’’. 
(2) The table of parts for subchapter D of 
chapter 32 of such Code is amended by inserting 
after the item relating to part I the following new 
item: 
‘‘Part II. Water-intensive crops.’’. 
(3) The table of sections for subchapter A of 
chapter 98 of the Internal Revenue Code of 1986 is 
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amended by adding at the end the following new 
item: 
‘‘Sec. 9512. Drought Trust Fund.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to sales after the date of the enact-
ment of this Act. 
Æ 
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