Financing Lead Out of Water Act of 2025

This bill amends the Internal Revenue Code of 1986 to ease financing for lead service line replacement projects by modifying private business use requirements for tax-exempt bonds. Specifically, it clarifies that "qualified lead service line replacement use" will not be considered private business use for bond purposes. This means that when a public water system uses bond proceeds to replace the privately-owned portion of a lead service line, it will not trigger private business use rules, provided the replacement is to achieve or maintain compliance with a national primary drinking water regulation for lead. By removing this classification, the bill aims to make it easier and more cost-effective for communities to fund the removal of lead pipes. The amendments will apply to obligations issued after December 31, 2025 , facilitating future infrastructure investments in safe drinking water.