WASHINGTON – U.S. Rep. Annie Kuster (NH-02) introduced a bipartisan bill that would provide relief to small private rural water utilities and prevent increases in housing costs in rural communities where affordable housing is already a challenge. An identical bill was introduced in the Senate by Senators Jeanne Shaheen (D-NH) and Lisa Murkowski (R-AK). The provisions of this legislation are also included in the Infrastructure Investment and Jobs Act, an extensive bipartisan infrastructure package currently under consideration in the House of Representatives.

Traditionally, when a housing development is built, the developer will install water infrastructure, which is then transferred to a water utility free of charge. Prior to 2017, the water utility was not taxed on this, which prevented the homebuyer from paying twice for the infrastructure. Under current law, this transfer is taxed and state regulators pass it back to the developer, which drives up home costs by making homebuyers pay again for these assets. This tax also is causing cancellations of planned developments, which further restricts housing availability in rural communities that are already struggling with housing supply and affordability issues. This bill would eliminate this burdensome tax on the transfer of water infrastructure from developers to utilities.

“I am proud to once again work with Senator Shaheen on this commonsense, bipartisan legislation that has now been incorporated into the infrastructure package,” said Rep. Kuster. “It is imperative that Congress fix this error from the Tax Cuts and Jobs Act that needlessly increases housing costs and makes it harder to provide clean drinking water to families. This tax has already had a negative impact in my district, where building out new water infrastructure projects is critical to mitigating exposure to PFAS and other harmful chemicals that can infiltrate private well systems. I urge my colleagues to quickly pass this bill to help our small business water providers and protect public health in rural communities.”

In New Hampshire, a small drinking water provider is facing more than $1.15 million in federal taxes because it was involved in constructing the Southern New Hampshire Regional Water Project. The tax has been deemed “unfair” by state officials, who say it could have a substantial negative effect on companies partnering with the state or municipalities on public utility projects.

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