Maintaining and Enhancing Hydroelectricity and River Restoration Act of 2023
This bill establishes a new investment tax credit in the amount of 30% of the basis of any hydropower improvement property.
The bill defines hydropower improvement property as property that
Further, written approval for hydropower improvement property must be obtained from the Federal Energy Regulatory Commission or state or local officials prior to January 1, 2032.
The bill also allows an election to claim the investment tax credit for qualified progress expenses for some types of hydropower improvement property in advance of such property being placed into service. Any investment tax credit amount claimed for qualified progress expenses reduces the amount of the investment tax credit that may be claimed once the hydropower improvement property is placed into service.
The bill authorizes certain entities, including tax-exempt and governmental entities, to treat the investment tax credit for hydropower improvement property as a payment of tax and receive a refund of any overpayment (also known as elective pay).
Finally, the investment tax credit for hydropower improvement property may be transferred (i.e., sold).
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2994 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
1st Session
S. 2994
To amend the Internal Revenue Code of 1986 to support upgrades at
existing hydroelectric dams in order to increase clean energy
production, improve the resiliency and reliability of the United States
electric grid, enhance the health of the Nation's rivers and associated
wildlife habitats, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 28 (legislative day, September 22), 2023
Ms. Cantwell (for herself, Ms. Murkowski, Mr. Sullivan, Ms. Stabenow,
Mr. King, Mr. Tillis, and Mrs. Gillibrand) introduced the following
bill; which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to support upgrades at
existing hydroelectric dams in order to increase clean energy
production, improve the resiliency and reliability of the United States
electric grid, enhance the health of the Nation's rivers and associated
wildlife habitats, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Maintaining and Enhancing
Hydroelectricity and River Restoration Act of 2023''.
SEC. 2. CREDIT FOR MAINTAINING AND ENHANCING HYDROELECTRIC FACILITIES.
(a) In General.--Subpart E of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by inserting after
section 48E the following new section:
``SEC. 48F. CREDIT FOR MAINTAINING AND ENHANCING HYDROELECTRIC
FACILITIES.
``(a) In General.--For purposes of section 46, the credit for
maintaining and enhancing hydroelectric facilities for any taxable year
is an amount equal to 30 percent of the basis of any hydropower
improvement property placed in service during such taxable year.
``(b) Certain Progress Expenditure Rules Made Applicable.--Rules
similar to the rules of subsections (c)(4) and (d) of section 46 (as in
effect on the day before the date of the enactment of the Revenue
Reconciliation Act of 1990) shall apply for purposes of subsection (a).
``(c) Hydropower Improvement Property.--In this section, the term
`hydropower improvement property' means property--
``(1) which--
``(A) adds or improves fish passage at a qualified
dam,
``(B) maintains or improves the quality of the
water retained or released by a qualified dam,
``(C) promotes downstream sediment transport
processes and habitat maintenance with respect to a
qualified dam,
``(D) upgrades, repairs, or reconstructs a
qualified dam to meet Federal dam safety and security
standards,
``(E) improves the public uses of, and access to,
public waterways impacted by a qualified dam in a
manner consistent with a license issued by the Federal
Energy Regulatory Commission or a settlement agreement
related to such a license,
``(F) removes an obsolete river obstruction, or
``(G) places into service an approved remote dam,
and
``(2) for which, prior to January 1, 2032, the taxpayer
receives written approval with respect to any property
described in paragraph (1) from the Federal Energy Regulatory
Commission or State or local officials, as appropriate.
``(d) Other Definitions.--In this section--
``(1) Approved remote dam.--The term `approved remote dam'
means--
``(A) a hydroelectric dam which--
``(i) exclusively services communities not
interconnected to the Electric Reliability
Council of Texas, the Eastern Interconnection,
or the Western Interconnection,
``(ii) was licensed by the Federal Energy
Regulatory Commission before December 31, 2020,
``(iii) does not contribute to atmosphere
pollution, and
``(iv) has a maximum net output of not
greater than 20 megawatts, and
``(B) any interconnection property associated with
a dam described in subparagraph (A).
``(2) Fish passage.--The term `fish passage' means, with
respect to any qualified dam, any new or upgraded turbine,
fishway, or other fish passage technology which improves fish
migration and survival rates.
``(3) Interconnection property.--The term `interconnection
property' means, with respect to any dam described in paragraph
(1)(A), any tangible property--
``(A) to enable the delivery of electricity from
such dam to any customer, and
``(B) which satisfies the requirements under
clauses (ii) and (iii) of section 48(a)(8)(B).
``(4) Obsolete river obstruction.--The term `obsolete river
obstruction' means a qualified nonpowered dam (as defined in
section 34(e)(3) of the Federal Power Act (16 U.S.C.
823e(e)(3))) no longer serving its intended purpose.
``(5) Qualified dam.--The term `qualified dam' means a
hydroelectric dam that is licensed by the Federal Energy
Regulatory Commission or legally operating without such a
license before the date of enactment of this section.''.
(b) Elective Payment and Transfer of Credit.--
(1) Elective payment.--Section 6417 of the Internal Revenue
Code of 1986 is amended--
(A) in subsection (b), by adding at the end the
following:
``(13) The credit for maintaining and enhancing
hydroelectric facilities under section 48F.'', and
(B) in subsection (d)(1)--
(i) in subparagraph (E), by striking ``(C),
or (D)'' each place it appears and inserting
``(C), (D), or (E)'',
(ii) by redesignating subparagraph (E) (as
amended by clause (i)) as subparagraph (F), and
(iii) by inserting after subparagraph (D)
the following:
``(E) Election with respect to credit for
maintaining and enhancing hydroelectric facilities.--If
a taxpayer other than an entity described in
subparagraph (A) makes an election under this
subparagraph with respect to any taxable year in which
such taxpayer has, after December 31, 2022, placed in
service hydropower improvement property (as defined in
section 48F(c)), such taxpayer shall be treated as an
applicable entity for purposes of this section for such
taxable year, but only with respect to the credit
described in subsection (b)(13).''.
(2) Transfer.--Section 6418(f)(1)(A) of the Internal
Revenue Code of 1986 is amended by adding at the end the
following:
``(xii) The credit for maintaining and
enhancing hydroelectric facilities under
section 48F.''.
(c) Conforming Amendments.--
(1) Section 46 of the Internal Revenue Code of 1986 is
amended--
(A) in paragraph (6), by striking ``and'' at the
end,
(B) in paragraph (7), by striking the period at the
end and inserting ``, and'', and
(C) by adding at the end the following:
``(8) the credit for maintaining and enhancing
hydroelectric facilities.''.
(2) Section 49(a)(1)(C) of such Code is amended--
(A) in clause (vii), by striking ``and'' at the
end,
(B) in clause (viii), by striking the period at the
end and inserting ``, and'', and
(C) by adding at the end the following:
``(ix) the basis of any hydropower
improvement property under section 48F.''.
(3) Section 50 of such Code is amended--
(A) in subsection (a)(2)(E), as amended by section
13702(b) of Public Law 117-169, by striking ``or
48E(e)'' and inserting ``48E(e), or 48F(b)'', and
(B) in subsection (d)(2)--
(i) in the matter preceding subparagraph
(A), by inserting ``or any hydropower
improvement property (as defined in section
48F(c))'' after ``any energy storage technology
(as defined in section 48(c)(6))'', and
(ii) in subparagraph (B), by striking
``energy storage technology'' each place it
appears and inserting ``energy storage
technology or hydropower improvement
property''.
(4) The table of sections for subpart E of part IV of
subchapter A of chapter 1 of such Code is amended by inserting
after the item relating to section 48E the following new item:
``Sec. 48F. Credit for maintaining and enhancing hydroelectric
facilities.''.
(d) Effective Date.--The amendments made by this section shall
apply to property placed in service after December 31, 2022.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
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