I 115th CONGRESS 1st Session H. R. 3248 IN THE HOUSE OF REPRESENTATIVES July 14, 2017 Mr. Cartwright (for himself, Mr. Blumenauer , Ms. Bordallo , Ms. Brownley of California , Mr. Connolly , Ms. Eshoo , Mr. Grijalva , Ms. Lofgren , Mr. Lowenthal , Mr. McGovern , Ms. Norton , Mr. Peters , Ms. Pingree , Mr. Polis , Ms. Slaughter , Mr. Takano , Mr. Thompson of California , Mr. Tonko , Ms. Tsongas , Ms. Velázquez , Mr. Welch , Mr. Langevin , Mr. Ted Lieu of California , and Mr. Huffman ) introduced the following bill; which was referred to the Committee on Energy and Commerce , and in addition to the Committees on Oversight and Government Reform , Armed Services , and Ways and Means , 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 encourage water efficiency.

1. Short title This Act may be cited as the Water Advanced Technologies for Efficient Resource Use Act of 2017 . 2. WaterSense (a) In general There is established within the Environmental Protection Agency a WaterSense program to identify and promote water efficient products, buildings and landscapes, and services in order— (1) to reduce water use; (2) to reduce the strain on water, wastewater, and stormwater infrastructure; (3) to conserve energy used to pump, heat, transport, and treat water; and (4) to preserve water resources for future generations, through voluntary labeling of, or other forms of communications about, products, buildings and landscapes, and services that meet the highest water efficiency and performance standards. (b) Duties The Administrator of the Environmental Protection Agency shall— (1) promote WaterSense labeled products, buildings and landscapes, and services in the market place as the preferred technologies and services for— (A) reducing water use; and (B) ensuring product and service performance; (2) work to enhance public awareness of the WaterSense label through public outreach, education, water recycling and reuse technology research and development, and other means; (3) establish and maintain performance standards so that products, buildings and landscapes, and services labeled with the WaterSense label perform as well or better than their less efficient counterparts; (4) publicize the importance of proper installation of WaterSense plumbing products by a WaterSense-certified or, if WaterSense certification guidelines do not exist, licensed plumber or mechanical contractor, and the installation, maintenance, and audit of WaterSense irrigation systems by a WaterSense-certified irrigation professional to ensure optimal performance; (5) preserve the integrity of the WaterSense label; (6) regularly review and, when appropriate, update WaterSense criteria for categories of products, buildings and landscapes, and services, at least once every six years; (7) to the reasonable extent practicable, regularly estimate and make available to the public the estimated aggregate production, aggregate market penetration, and savings of water, energy, and capital costs of water, wastewater, and stormwater attributable to the use of WaterSense-labeled products, buildings, landscapes, facilities, processes, and services, at least annually; (8) solicit comments from interested parties and the public prior to establishing or revising a WaterSense category, specification, installation criterion, or other criterion (or prior to effective dates for any such category, specification, installation criterion, or other criterion); (9) provide reasonable notice to interested parties and the public of any changes (including effective dates), on the adoption of a new or revised category, specification, installation criterion, or other criterion, along with— (A) an explanation of changes; and (B) as appropriate, responses to comments submitted by interested parties; (10) provide appropriate lead time (as determined by the Administrator) prior to the applicable effective date for a new or significant revision to a category, specification, installation criterion, or other criterion, taking into account the timing requirements of the manufacturing, marketing, training, and distribution process for the specific product, building and landscape, or service category addressed; and (11) identify and, where appropriate, implement other voluntary approaches, such as labeling waterless devices that perform the same function as a water consuming product or encouraging reuse, reclamation, and recycling technologies, in commercial, institutional, residential, municipal, and industrial sectors to improve water efficiency or lower water use while meeting the performance standards established under paragraph (3). 3. Federal procurement of water efficient products (a) Definitions In this section: (1) Agency The term agency has the meaning given that term in section 7902(a) of title 5, United States Code. (2) Watersense product or service The term WaterSense product or service means a product or service that is rated for water efficiency under the WaterSense program. (3) Watersense program The term WaterSense program means the program established by section 2 of this Act. (4) FEMP designated product The term FEMP designated product means a product that is designated under the Federal Energy Management Program of the Department of Energy as being among the highest 25 percent of equivalent products for efficiency. (5) Product and service The terms product and service do not include any water consuming product or service designed or procured for combat or combat-related missions. The terms also exclude products or services already covered by the Federal procurement regulations established under section 553 of the National Energy Conservation Policy Act ( 42 U.S.C. 8259b ). (b) Procurement of water efficient products (1) Requirement To meet the requirements of an agency for a water consuming product or service, the head of the agency shall, except as provided in paragraph (2), procure— (A) a WaterSense product or service; or (B) a FEMP designated product. A WaterSense plumbing product should preferably, when possible, be installed by a WaterSense-certified or, if WaterSense certification guidelines do not exist, licensed plumber or mechanical contractor, and a WaterSense irrigation system should preferably, when possible, be installed, maintained, and audited by a WaterSense-certified irrigation professional to ensure optimal performance. (2) Exceptions The head of an agency is not required to procure a WaterSense product or service or FEMP designated product under paragraph (1) if the head of the agency finds in writing that— (A) a WaterSense product or service or FEMP designated product is not cost-effective over the life of the product, taking current and future energy, water, and wastewater cost savings into account; or (B) no WaterSense product or service or FEMP designated product is reasonably available that meets the functional requirements of the agency. (3) Procurement planning The head of an agency shall incorporate into the specifications for all procurements involving water consuming products and systems, including guide specifications, project specifications, and construction, renovation, and services contracts that include provision of water consuming products and systems, and into the factors for the evaluation of offers received for the procurement, criteria used for rating WaterSense products and services and FEMP designated products. The head of an agency shall consider, to the maximum extent practicable, additional measures for reducing agency water consumption, including water reuse, reclamation, and recycling technologies, leak detection and repair, and use of waterless products that perform similar functions to existing water-consuming products. (c) Listing of water efficient products in federal catalogs WaterSense products and services and FEMP designated products shall be clearly identified and prominently displayed in any inventory or listing of products by the General Services Administration or the Defense Logistics Agency. The General Services Administration and the Defense Logistics Agency shall supply only WaterSense products or FEMP designated products for all product categories covered by the WaterSense program or the Federal Energy Management Program, except in cases where the agency ordering a product specifies in writing that no WaterSense product or FEMP designated product is available to meet the buyer’s functional requirements, or that no WaterSense product or FEMP designated product is cost-effective for the intended application over the life of the product, taking energy, water, and wastewater cost savings into account. (d) Regulations Not later than 180 days after the date of enactment of this Act, the Administrator of the Environmental Protection Agency shall issue regulations to carry out this section. 4. Early Adopter Water Efficient Products Incentive Programs (a) Definitions In this section: (1) Administrator The term Administrator means the Administrator of the Environmental Protection Agency. (2) Eligible entity The term eligible entity means a State government, local or county government, tribal government, wastewater or sewage utility, municipal water authority, energy utility, water utility, or nonprofit organization that meets the requirements of subsection (b). (3) Incentive program The term incentive program means a program for administering financial incentives for consumer purchase and installation of residential water efficient products and services as described in subsection (b)(1). (4) Residential water efficient product or service (A) In general The term residential water efficient product or service means a product or service for a single-family or multifamily residence or its landscape that is rated for water efficiency and performance— (i) by the WaterSense program; or (ii) by an incentive program and approved by the Administrator. Categories of water efficient products and services may include faucets, irrigation technologies and services, point-of-use water treatment devices, reuse, reclamation, and recycling technologies, toilets, and showerheads. (B) Third-party certification A product shall not be treated as a residential water efficient product until after the product— (i) is tested by an accredited third-party certifying body or laboratory in accordance with the WaterSense program; (ii) is certified by such body or laboratory as meeting the performance and efficiency requirements of such program; and (iii) is authorized by such program to use its label. (5) State The term State means each of the several States of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. (6) Watersense program The term WaterSense program means the program established by section 2 of this Act. (b) Eligible entities An entity shall be eligible to receive an allocation under subsection (c) if the entity— (1) establishes (or has established) an incentive program to provide rebates, vouchers, other financial incentives, or direct installs to consumers for the purchase and installation of residential water efficient products or services; (2) submits an application for the allocation at such time, in such form, and containing such information as the Administrator may require; and (3) provides assurances satisfactory to the Administrator that the entity will use the allocation to supplement, but not supplant, funds made available to carry out the incentive program. (c) Amount of allocations For each fiscal year, the Administrator shall determine the amount to allocate to each eligible entity to carry out subsection (d) taking into consideration— (1) the population served by the eligible entity in the most recent calendar year for which data are available; (2) the targeted population of the eligible entity's incentive program, such as general households, low-income households, or first-time homeowners, and the probable effectiveness of the incentive program for that population; (3) for existing programs, the effectiveness of the incentive program in encouraging the adoption of water efficient products and services; and (4) any prior year's allocation to the eligible entity that remains unused. (d) Use of allocated funds Funds allocated to an entity under subsection (c) may be used to pay up to 50 percent of the cost of establishing and carrying out an incentive program. (e) Fixture recycling Entities are encouraged to promote or implement fixture recycling programs to manage the disposal of older fixtures replaced due to the incentive program under this section. (f) Issuance of rebates Financial incentives may be provided to consumers that meet the requirements of the incentive program. The entity may issue all financial incentives directly to consumers or, with approval of the Administrator, delegate some or all financial incentive administration to other organizations including, but not limited to, local governments, municipal water authorities, and water utilities. The amount of a financial incentive shall be determined by the entity, taking into consideration— (1) the amount of the allocation to the entity under subsection (c); (2) the amount of any Federal, State, or other organization's tax or financial incentive available for the purchase of the residential water efficient product or service; (3) the amount necessary to change consumer behavior to purchase water efficient products and services; and (4) the consumer expenditures for onsite preparation, assembly, and original installation of the product. (g) Authorization of appropriations There are authorized to be appropriated to the Administrator to carry out this section $50,000,000 for fiscal year 2018, $100,000,000 for fiscal year 2019, $150,000,000 for fiscal year 2020, $100,000,000 for fiscal year 2021, and $50,000,000 for fiscal year 2022. 5. Early adopter water efficient products incentive programs (a) In general Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting before section 140 the following new section: 139F. Early adopter water efficient products incentive programs (a) In general In the case of an individual, gross income does not include any amount received under an incentive program under section 4 of the Water Advanced Technologies for Efficient Resource Use Act of 2017 . (b) Denial of double benefit Notwithstanding any other provision of this subtitle, no deduction or credit shall be allowed for, or by reason of, any expenditure to the extent of the amount excluded under subsection (a) for any amount which was provided with respect to such expenditure. The adjusted basis of any property shall be reduced by the amount excluded under subsection (a) which was provided with respect to such property. . (b) Conforming amendment The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting before the item relating to section 140 the following new item: Sec. 139F. Early adopter water efficient products incentive programs. . (c) Effective date The amendments made by this Act shall apply to taxable years beginning after the date of the enactment of this Act.