I 
111TH CONGRESS 
1ST SESSION H. R. 4132 
To amend the Internal Revenue Code of 1986 to provide for clean renewable 
water supply bonds. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 19, 2009 
Mr. BECERRA (for himself, Ms. GINNY BROWN-WAITE of Florida, Ms. ROY-
BAL-ALLARD, Mr. PUTNAM, and Ms. RICHARDSON) introduced the fol-
lowing bill; which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
for clean renewable water supply bonds. 
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 ‘‘Clean Renewable 
Water Supply Act of 2009’’. 
SEC. 2. CLEAN RENEWABLE WATER SUPPLY BONDS. 
(a) IN GENERAL.—Subpart I of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
section: 
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‘‘SEC. 54G. CLEAN RENEWABLE WATER SUPPLY BONDS. 
‘‘(a) CLEAN RENEWABLE WATER SUPPLY BONDS.— 
For purposes of this subpart, the term ‘clean renewable 
water supply bond’ means any bond issued as part of an 
issue if— 
‘‘(1) 100 percent of the available project pro-
ceeds of such issue are to be used for capital expend-
itures incurred by qualified borrowers for 1 or more 
qualified projects, 
‘‘(2) the bond is issued by a qualified issuer, 
‘‘(3) the issuer designates such bond for pur-
poses of this section, and 
‘‘(4) the bond is issued— 
‘‘(A) pursuant to an allocation by the Sec-
retary to such issuer of a portion of the na-
tional clean renewable water supply bond limita-
tion under subsection (b), and 
‘‘(B) not later than 6 months after the 
date that such qualified issuer receives an allo-
cation under subsection (b). 
‘‘Any allocation under subsection (b) not used within the 
6-month period described in paragraph (4)(B) shall be ap-
plied to increase the national clean renewable water supply 
bond limitation for the next succeeding application period 
under subsection (b)(2)(B). 
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‘‘(b) NATIONAL LIMITATION ON AMOUNT OF BONDS 
DESIGNATED.— 
‘‘(1) IN GENERAL.—There is a national clean 
renewable water supply bond limitation for each cal-
endar year. Such limitation is— 
‘‘(A) $100,000,000 for 2010, 
‘‘(B) $150,000,000 for 2011, 
‘‘(C) $200,000,000 for 2012, 
‘‘(D) $250,000,000 for 2013, 
‘‘(E) $500,000,000 for 2014, 
‘‘(F) $750,000,000 for 2015, 
‘‘(G) $1,000,000,000 for 2016, 
‘‘(H) $1,500,000,000 for 2017, 
‘‘(I) $1,750,000,000 for 2018, and 
‘‘(J) $0 for 2019 and thereafter. 
‘‘(2) ALLOCATION OF LIMITATION.— 
‘‘(A) IN GENERAL.—The limitation under 
paragraph (1) shall be allocated by the Sec-
retary among qualified projects as provided in 
this paragraph. 
‘‘(B) METHOD OF ALLOCATION.—For each 
calendar year for which there is a national 
clean renewable water supply bond limitation 
greater than zero, the Secretary shall publish a 
notice soliciting applications by qualified issuers 
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for allocations of such limitation to qualified 
projects. Such notice shall specify a 3-month 
application period in the calendar year during 
which the Secretary will accept such applica-
tions. Within 30 days after the end of such ap-
plication period, and subject to the require-
ments of subparagraph (C), the Secretary shall 
allocate such limitation to qualified projects on 
a first-come, first-served basis, based on the 
order in which such applications are received 
from qualified issuers. 
‘‘(C) ALLOCATION REQUIREMENTS.— 
‘‘(i) 
CERTIFICATIONS
REGARDING 
REGULATORY APPROVALS.—No portion of 
the national clean renewable water supply 
bond limitation shall be allocated to a 
qualified project unless the qualified issuer 
has certified in its application for such al-
location that as of the date of such appli-
cation the qualified issuer or qualified bor-
rower has received all Federal and State 
regulatory approvals necessary to construct 
the qualified project. 
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‘‘(ii) RESTRICTION ON ALLOCATIONS 
TO LARGE PROJECTS OR TO INDIVIDUAL 
PROJECTS.— 
‘‘(I) IN
GENERAL.—The Sec-
retary shall not allocate— 
‘‘(aa) more than 60 percent 
of the national clean renewable 
water supply bond limitation for 
a calendar year to 1 or more 
large projects, 
‘‘(bb) more than 18 percent 
of the amount of the national 
clean renewable water supply 
bond limitation for a calendar 
year to any single project that is 
a large project, 
‘‘(cc) more than 12 percent 
of the national clean renewable 
water supply bond limitation for 
a calendar year to any single 
project that is not a large 
project, or 
‘‘(dd) 
more 
than 
$95,000,000 
for 
all 
calendar 
years for any single project. 
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‘‘(II) DEFINITION
OF
LARGE 
PROJECT.—For purposes of subclause 
(I), the term ‘large project’ means a 
qualified project that is designed to 
deliver more than 10,000,000 gallons 
of water per day. 
‘‘(III) EXCEPTION
TO
RESTRIC-
TION.—Subclause (I) shall not apply 
to the extent its application would 
cause any portion of the national 
clean renewable water supply bond 
limitation for the calendar year to re-
main unallocated, based on applica-
tions for allocations of such limitation 
received by the Secretary during the 
application period referred to in sub-
paragraph (B). 
‘‘(3) CARRYOVER OF UNUSED LIMITATION.—If 
the clean renewable water supply bond limitation for 
any calendar year exceeds the aggregate amount al-
located under paragraph (2) for such year, such lim-
itation for the succeeding calendar year shall be in-
creased by the amount of such excess. 
‘‘(c) MATURITY LIMITATION.— 
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‘‘(1) IN GENERAL.—A bond shall not be treated 
as a clean renewable water supply bond if the matu-
rity of such bond exceeds 20 years. 
‘‘(2) COORDINATION WITH SECTION 54A.—The 
maturity limitation in section 54A(d)(5) shall not 
apply to any clean renewable water supply bond. 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) GOVERNMENTAL BODY.—The term ‘gov-
ernmental body’ means any State or Indian tribal 
government, or any political subdivision thereof. 
‘‘(2) LOCAL WATER COMPANY.—The term ‘local 
water company’ means any entity responsible for 
providing water service to the general public (includ-
ing electric utility, industrial, agricultural, commer-
cial, or residential users) pursuant to State or tribal 
law. 
‘‘(3) QUALIFIED BORROWER.—The term ‘quali-
fied borrower’ means a governmental body or a local 
water company. 
‘‘(4) QUALIFIED
DESALINATION
FACILITY.— 
The term ‘qualified desalination facility’ means any 
facility that is used to produce new water supplies 
by desalinating seawater, groundwater, or surface 
water if the facility’s source water includes chlorides 
or total dissolved solids that, either continuously or 
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seasonally, exceed maximum permitted levels for pri-
mary or secondary drinking water under Federal or 
State law (as in effect on the date of issuance of the 
issue). 
‘‘(5) QUALIFIED GROUNDWATER REMEDIATION 
FACILITY.—The term ‘qualified groundwater remedi-
ation facility’ means any facility that is used to re-
claim contaminated or naturally impaired ground-
water for direct delivery for potable use if the facili-
ty’s source water includes constituents that exceed 
maximum contaminant levels regulated under the 
Safe Drinking Water Act (as in effect on the date 
of the enactment of this section). 
‘‘(6) QUALIFIED ISSUER.—The term ‘qualified 
issuer’ means— 
‘‘(A) a governmental body, or 
‘‘(B) in the case of a State or political sub-
division thereof (as defined for purposes of sec-
tion 103), any entity qualified to issue tax-ex-
empt bonds under section 103 on behalf of such 
State or political subdivision. 
‘‘(7) QUALIFIED PROJECT.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
project’ means any facility owned by a qualified 
borrower which is a— 
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‘‘(i) qualified desalination facility, 
‘‘(ii) qualified recycled water facility, 
‘‘(iii) qualified groundwater remedi-
ation facility, or 
‘‘(iv) facility that is functionally re-
lated or subordinate to a facility described 
in clause (i), (ii), or (iii). 
‘‘(B) ENVIRONMENTAL IMPACT.—A project 
shall not be treated as a qualified project under 
subparagraph (A) unless such project is de-
signed to comply with regulations issued under 
subsection (e) relating to the minimization of 
the environmental impact of the project. 
‘‘(8) QUALIFIED RECYCLED WATER FACILITY.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
recycled water facility’ means any wastewater 
treatment facility, distribution facility, or dis-
tribution system which— 
‘‘(i) exceeds the requirements for the 
treatment and disposal of wastewater 
under the Clean Water Act and any other 
Federal or State water pollution control 
standards for the discharge and disposal of 
wastewater to surface water, land, or 
groundwater (as such requirements and 
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standards are in effect on the date of 
issuance of the issue), and 
‘‘(ii) except as provided in subpara-
graph (B), is used to reclaim wastewater 
produced by the general public (including 
electric utility, industrial, agricultural, 
commercial, or residential users) to the ex-
tent such reclaimed wastewater is used for 
a beneficial use that the issuer reasonably 
expects as of the date of issuance of the 
issue otherwise would have been satisfied 
with potable water supplies. 
‘‘(B) IMPERMISSIBLE
USES.—Reclaimed 
wastewater is not used for a use described in 
subparagraph (A)(ii) to the extent such re-
claimed wastewater is— 
‘‘(i) discharged into a waterway or 
used to meet waterway discharge permit 
requirements and not used to supplement 
potable water supplies, 
‘‘(ii) used to restore habitat, 
‘‘(iii) used to provide once-through 
cooling for an electric generation facility, 
or 
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‘‘(iv) intentionally introduced into the 
groundwater and not used to supplement 
potable water supplies. 
‘‘(e) REGULATIONS.—The Secretary shall prescribe 
such regulations as are necessary to carry out the pur-
poses of this section, including regulations promulgated in 
consultation with the Administrator of the Environmental 
Protection Agency to ensure the environmental impact of 
qualified facilities is minimized.’’. 
(b) STUDY ON ALLOCATION METHOD.— 
(1) IN GENERAL.—The Secretary of the Treas-
ury shall conduct a study on the method of alloca-
tion for the national limitation provided under sec-
tion 54G(b)(2) of the Internal Revenue Code of 
1986 (as added by subsection (a)) in order to deter-
mine whether a different allocation method would 
better result in the development of projects to pro-
vide new supplies of water in a more efficient man-
ner. In assessing the advisability of a different allo-
cation method, the study shall take into account— 
(A) the administrative burdens on the Fed-
eral government and issuers, and 
(B) the environmental impact of such 
projects, and 
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(C) the cost effectiveness of the projects 
funded. 
The study shall include an examination of at least 
three rounds of allocations. 
(2) CONSULTATION AND PUBLIC COMMENT.— 
Such study shall be conducted in consultation with 
the Secretary of the Interior and the Administrator 
of the Environmental Protection Agency and shall 
allow for public comment. 
(3) SUBMISSION
TO
CONGRESS.—The study, 
and any recommended changes to the allocation 
method, shall be submitted to the Committee on 
Ways and Means of the House of Representatives 
and the Committee on Finance of the Senate before 
July 1, 2014. 
(c) CONFORMING AMENDMENTS.— 
(1) Paragraph (1) of section 54A(d) of the In-
ternal Revenue Code of 1986 is amended by striking 
‘‘or’’ at the end of subparagraph (D), by inserting 
‘‘or’’ at the end of subparagraph (E), and by insert-
ing after subparagraph (E) the following new sub-
paragraph: 
‘‘(F) a clean renewable water supply 
bond,’’. 
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