# Plain Language Summary: Domestic Water Protection Act of 2023

This bill creates a new tax on water-intensive crops grown in drought areas by foreign producers and sellers. Specifically, it imposes a 300 percent excise tax—meaning the tax equals three times the crop's selling price—on water-intensive crops grown in areas experiencing severe drought that lasts more than six months. The tax applies only to manufacturers, producers, or exporters who are foreign entities (nonresident aliens, foreign corporations, foreign governments, or foreign trusts). So if a foreign company grows water-intensive crops like alfalfa or cotton in drought-stricken regions of the American Southwest and sells them, they would owe this substantial tax.

The money collected from this tax goes into a new "Drought Trust Fund" that would be used to support the WaterSmart Drought Response Program, which helps communities and farmers adapt to drought conditions. This means the tax revenue would theoretically be reinvested in drought relief and water management efforts. The bill essentially uses taxation as a tool to discourage foreign agricultural operations from using scarce water resources during droughts while generating funds for drought response initiatives.

The practical effect would likely be to make it much more expensive for foreign entities to grow and export water-intensive crops from drought-affected U.S. regions. This could reduce the amount of water being used for agriculture in these areas during droughts, though it could also increase food prices for consumers if foreign producers pass the tax costs along. The bill specifically targets foreign producers rather than American farmers, meaning domestic agricultural operations would not face this tax.