Congress has a marvelous opportunity as members negotiate the various elements of tax reform and the federal budget. Our senators and representatives have the chance to revise tax rules to reward consumers who save water and to authorize the United States Environmental Protection Agency (EPA)’s WaterSense program, which has saved 2.1 trillion gallons of water over a little more than a decade. Authorization, or codification, would provide the WaterSense program with greater permanence by giving it a direct annual congressional appropriation rather than leaving its annual budget up to the EPA’s discretion.
Members of Congress from California and other Western states can lead this advocacy, which can benefit the whole country. Federal tax reform related to water efficiency rebates and WaterSense authorization can create more incentives for water savings across the entire nation, saving the necessity for a state-by-state approach to this challenge.
Making rebates received for water conservation improvements exempt from federal income tax is “win-win” thinking. Right now, if you receive a $100 rebate for installing a water-efficient toilet you must pay federal taxes on it. That should change.
The bipartisan Water Conservation Rebate Tax Parity Act (H.R. 448/S. 1464) amends federal tax law to exclude homeowners from paying income tax on rebates from water utilities for water conservation improvements, including the purchase of manufactured products certified by the EPA’s WaterSense program. This legislation is sponsored by Jared Huffman (D-California) and Dana Rohrabacher (R-California) in the House and Dianne Feinstein (D-California) and Dean Heller (R-Nevada) in the Senate.
WaterSense is a voluntary public-private sponsorship program that encourages the use of water-efficient toilets, showerheads, faucets and other plumbing products – most of which are manufactured by U.S. companies. More than 21,000 product models bear the WaterSense label. While saving 2.1 trillion gallons of water since 2006, WaterSense has enabled consumers to keep more than $46.3 billion in water and energy bill savings in their pockets. As a result, the program enjoys bipartisan support in Congress, as well as from plumbing manufacturers, retailers, water utilities, state and local governments and nongovernmental organizations.
The savings achieved by WaterSense, while impressive, would be even greater if more American homeowners and businesses installed water-efficient plumbing products. A 2017 research study released by Plumbing Manufacturers International (PMI) and the Alliance for Water Efficiency showed that water-efficient toilets could save up to 170 billion potable gallons of water per year across just five states – Arizona, California, Colorado, Georgia and Texas – all facing water scarcity due to drought, regional population growth and other factors.
Unfortunately, many homes in these states and elsewhere still do not have plumbing products that meet federal water-efficiency standards. And even more do not have WaterSense products, which are certified by an independent third-party laboratory to save 20 percent more water than those meeting federal standards. A 2015 PMI-commissioned study conducted by GMP Research found that only 7 percent of toilets, 25.4 percent of faucets and 28.7 percent of showerheads installed nationwide were WaterSense models.
The plumbing manufacturing industry and its allies have been fighting hard recently, not only to create awareness of the underutilization of water-efficient plumbing in efforts to save water, but also to spare the WaterSense program from threatened budget cuts and gain much-needed authorization for the program.
The U.S. EPA Office of Inspector General agrees with us about the program’s value, having recently deemed WaterSense “a sound model for voluntary programs” in an August 1 report that evaluated EPA controls assessing the accuracy of the program’s annual accomplishments and the program’s claims of water and energy savings.
WaterSense is a federal program that has achieved quantifiable water and energy savings, a rave review from the EPA inspector general and bipartisan support. Let’s reward this strong track record with authorization and consumer relief on rebate taxes – and set an example of how to encourage all Americans to save water.
Three bills have been introduced that include language providing WaterSense authorization: the Water Efficiency Improvement Act of 2017 (S. 1700), the Clean, Safe, Reliable Water Infrastructure Act (S. 1137) and the Water Advanced Technologies for Efficient Resource Use Act of 2017 (H.R. 3248).
The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Water Deeply.