NLC and Cities Win on Lead Pipe Replacement

President Joe Biden, speaking at the National League of Cities (NLC) Congressional Cities Conference, praised the achievement of providing funding through the Bipartisan Infrastructure Law (BIL) to replace lead pipes in communities across the country, including residential lead pipes Properties associated with houses.

The President was able to demonstrate this to city leaders because in late February the Internal Revenue Service (IRS) paved the way for cities, towns and villages to move forward by issuing critical guidance that the NLC helped shape.


In 2021, the Biden-Harris Administration announced a comprehensive lead pipe and paint action plan to accelerate lead pipe replacement. As part of this plan, the U.S. Environmental Protection Agency (EPA) recently proposed improvements to lead and copper rules that would require water systems to replace all lead pipes within ten years. This requirement follows revisions to EPA's lead and copper rules completed in 2021, which require municipal water systems to complete a lead service inventory by October 2024.

BIL is providing $15 billion to replace leading utilities in communities, both public and private. Additionally, lead pipe replacement was specifically permitted and encouraged as an eligible use under the American Rescue Plan Act. The Biden administration estimates that 9.2 million households are connected through leading service lines.

While some municipalities have voluntarily moved forward with public and private lead pipe replacement projects, others had held off on beginning the private lead pipe replacement process because a previous IRS ruling had shown that grants from a municipality to a resident were possible in certain cases result in taxable income for that resident.

In the case of a residential lead pipe replacement, a homeowner's income could increase by $10,000 in a tax year – the average cost of replacement. For a family of four living at the poverty level, which is about $26,000 a year, their earned income tax credit would be reduced by $1,166, or nearly 20 percent. For lower-income families, this means a significant loss of income.

A win for NLC and cities

NLC took a two-pronged approach to achieve an outcome that does not place a financial burden on communities or residents. First, NLC courted a champion in the Senate, where there is an active tax law that could potentially be changed. Blaine Griffin, NLC Chairman of Finance, Administration and Intergovernmental Relations, Council President for the City of Cleveland, Ohio, accompanied the NLC staff on a phone call with Senator Sherrod Brown's staff. At this meeting, the employee was informed of the problem and suggested helping.

NLC also met with the Office of the Chief Counsel of the IRS. NLC argued that including lead pipes in taxation would have far-reaching impacts on communities and their residents, thereby limiting the ability to achieve the Biden administration's goal of replacing all lead pipes.

On February 23, 2024, the IRS issued Notice 2024-10 stating that lead service line replacement does not generate revenue for residential property owners.

These guidelines pave the way for municipalities to begin work and allow other municipalities replacing pipes to proceed. The guidance also applies retroactively to previous local government replacement projects.

Although communities will not have enough funding to meet the replacement needs proposed in the lead and copper rule improvements, even if the funding is provided through the BIL, the clarity provided by the IRS announcement means that tens of thousands of households will be over These can have lead pipes that run into them will be replaced with new pipes without fear of additional tax burden. This is a win for communities, residents and public health.


Local governments can request free technical assistance for lead pipe replacement projects by applying through EPA's Water Technical Assistance program.

About the authors

About the authors

Carolyn Berndt is the Legislative Director for Sustainability on the Federal Advocacy team at the National League of Cities.

Michael Gleeson is legislative director of finance, administration and intergovernmental relations at the National League of Cities.

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