Congress offers $30 tax break per $100 spent on corporate water recycling
S. 4506 — Advancing Water Reuse Act · Filed by Ben Luján (D-NM) · 3 cosponsors · Introduced May 13, 2026 · Referred to committee
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What it does
This bill creates a federal tax credit worth 30% of the cost of water reuse infrastructure—systems that recycle wastewater for industrial, manufacturing, data center, or food processing use instead of drawing fresh groundwater. The credit applies to companies that build or upgrade recycling systems, replace freshwater with recycled water, or transfer such property to utilities under a binding agreement. The credit expires 10 years after enactment.
Why we flagged it
The bill's operative mechanism is a 30% investment tax credit—a direct federal subsidy—flowing to corporations and industrial facilities that adopt water recycling. While framed as environmental policy, the primary effect is to reduce the after-tax cost of capital investment for large industrial users, not to mandate or broadly incentivize water conservation.
What the text implies
- The 'special rule for certain property transferred to utilities' (Section 48F(d)) allows a corporation to claim the 30% credit even when it transfers the recycling system to a utility, effectively allowing the corporation to capture the tax benefit while the utility owns and operates the asset—a potential double-subsidy structure.
- The credit applies to 'data center' facilities with no efficiency or public-benefit threshold, meaning a data center in a water-rich region could claim the credit for recycling systems that provide minimal conservation benefit.
- The 10-year sunset is long enough to anchor investment expectations and create lobbying pressure for renewal, potentially locking in a recurring corporate subsidy.
- No requirement that recycled water actually replace freshwater use—only that the system 'replaces the use of freshwater' in the facility's production, which could mean marginal displacement while the facility continues heavy freshwater consumption elsewhere.
Section numbers refer to the bill text the analysis read — linked under Primary records below.
Who it affects
The bill addresses a genuine public good—water conservation in water-stressed regions—by incentivizing private investment in recycling infrastructure that reduces freshwater depletion. However, the 30% tax credit is a direct subsidy to corporations and industrial facilities, shifting the cost to taxpayers while the primary beneficiaries are large industrial users (data centers, food processors, manufacturers) rather than households or small businesses facing water scarcity.
Who stands to gain
- large industrial manufacturers
- data center operators
- food processing companies
- water utilities (under property-transfer provisions)
- engineering and construction firms (capital equipment suppliers)
Named in the bill
Internal Revenue Code of 1986, Section 48F (new), Section 46 (amended), industrial facilities, data centers, food processing facilities, municipal water providers, utilities, water recycling systems
Where it stands
3 cosponsors: 2 Democrats, 1 Republicans.
- May 13, 2026 — Introduced · Congress.gov: “Introduced in Senate”
- May 13, 2026 — Referred to Senate Committee on Finance · Congress.gov: “Read twice and referred to the Committee on Finance”
Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.
Money around this bill
9 lobbying clients named this bill on 9 disclosure filings across 2 quarters, Mar 2026 to Jun 2026. Those filings disclosed $17,584,000 in lobbying spend. A filing names 7 bills on average, so that figure is what each filing reported, not a share belonging to this bill.
More lobbying clients named this bill than 89% of bills with at least one filing.
Ben Luján, the sponsor, reported $1,880,294 in PAC receipts in the 2026 cycle.
- Chamber of Commerce of the U.S.A. — $16,950,000 on 1 filing
- Diageo North America — $400,000 on 1 filing
- Association of Metropolitan Water Agencies — $120,000 on 1 filing
- Watereuse — $40,000 on 1 filing
- West Basin Municipal Water District — $40,000 on 1 filing
Lobbying Disclosure Act filings through Jul 25, 2026. A filing shows who paid to lobby on a bill it names, not what changed.
How this was measured
Analysis — Quorum's AI read the bill text published by Congress.gov (4,548 characters) on Aug 21, 2026. Section numbers in the findings refer to that text, linked below; transparency and hidden-provision scores are compared against the median of 16,222 analysed bills.
Status and sponsors — Congress.gov's bill record — actions, committee referrals and cosponsors — loaded nightly. The timeline shows status changes, not every procedural action.
Money — Senate Lobbying Disclosure Act filings whose specific-issue field names this bill for quarters ending Mar 2026 to Jun 2026. A filing's amount is reported whole beside the median number of bills a filing names; it is never divided across them. PAC receipts are FEC-reported contributions to the sponsor's candidate committee in the 2026 cycle.
As of — lobbying records through Jul 25, 2026 · page rendered 2026-10-20.
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