S2994-118

1. Short title This Act may be cited as the Maintaining and Enhancing Hydroelectricity and River Restoration Act of 2023.

2. Credit for maintaining and enhancing hydroelectric facilities 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: 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. 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). In this section, the term hydropower improvement property means property— which— adds or improves fish passage at a qualified dam, maintains or improves the quality of the water retained or released by a qualified dam, promotes downstream sediment transport processes and habitat maintenance with respect to a qualified dam, upgrades, repairs, or reconstructs a qualified dam to meet Federal dam safety and security standards, 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, removes an obsolete river obstruction, or places into service an approved remote dam, and 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. In this section— The term approved remote dam means— a hydroelectric dam which— exclusively services communities not interconnected to the Electric Reliability Council of Texas, the Eastern Interconnection, or the Western Interconnection, was licensed by the Federal Energy Regulatory Commission before December 31, 2020, does not contribute to atmosphere pollution, and has a maximum net output of not greater than 20 megawatts, and any interconnection property associated with a dam described in subparagraph (A). 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. The term interconnection property means, with respect to any dam described in paragraph (1)(A), any tangible property— to enable the delivery of electricity from such dam to any customer, and which satisfies the requirements under clauses (ii) and (iii) of section 48(a)(8)(B). 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. 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. Section 6417 of the Internal Revenue Code of 1986 is amended— in subsection (b), by adding at the end the following: The credit for maintaining and enhancing hydroelectric facilities under section 48F. in subsection (d)(1)— in subparagraph (E), by striking (C), or (D) each place it appears and inserting (C), (D), or (E), by redesignating subparagraph (E) (as amended by clause (i)) as subparagraph (F), and by inserting after subparagraph (D) the following: 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). Section 6418(f)(1)(A) of the Internal Revenue Code of 1986 is amended by adding at the end the following: The credit for maintaining and enhancing hydroelectric facilities under section 48F. Section 46 of the Internal Revenue Code of 1986 is amended— in paragraph (6), by striking and at the end, in paragraph (7), by striking the period at the end and inserting , and, and by adding at the end the following: the credit for maintaining and enhancing hydroelectric facilities. Section 49(a)(1)(C) of such Code is amended— in clause (vii), by striking and at the end, in clause (viii), by striking the period at the end and inserting , and, and by adding at the end the following: the basis of any hydropower improvement property under section 48F. Section 50 of such Code is amended— 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 in subsection (d)(2)— 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 in subparagraph (B), by striking energy storage technology each place it appears and inserting energy storage technology or hydropower improvement property. 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: The amendments made by this section shall apply to property placed in service after December 31, 2022. 48F.Credit for maintaining and enhancing hydroelectric facilities(a)In generalFor 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 applicableRules 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 propertyIn 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 definitionsIn this section—(1)Approved remote damThe 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 passageThe 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 propertyThe 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 obstructionThe 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 damThe 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.. (13)The credit for maintaining and enhancing hydroelectric facilities under section 48F., and (E)Election with respect to credit for maintaining and enhancing hydroelectric facilitiesIf 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).. (xii)The credit for maintaining and enhancing hydroelectric facilities under section 48F.. (8)the credit for maintaining and enhancing hydroelectric facilities.. (ix)the basis of any hydropower improvement property under section 48F.. Sec. 48F. Credit for maintaining and enhancing hydroelectric facilities..

48F. Credit for maintaining and enhancing hydroelectric facilities 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. 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). In this section, the term hydropower improvement property means property— which— adds or improves fish passage at a qualified dam, maintains or improves the quality of the water retained or released by a qualified dam, promotes downstream sediment transport processes and habitat maintenance with respect to a qualified dam, upgrades, repairs, or reconstructs a qualified dam to meet Federal dam safety and security standards, 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, removes an obsolete river obstruction, or places into service an approved remote dam, and 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. In this section— The term approved remote dam means— a hydroelectric dam which— exclusively services communities not interconnected to the Electric Reliability Council of Texas, the Eastern Interconnection, or the Western Interconnection, was licensed by the Federal Energy Regulatory Commission before December 31, 2020, does not contribute to atmosphere pollution, and has a maximum net output of not greater than 20 megawatts, and any interconnection property associated with a dam described in subparagraph (A). 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. The term interconnection property means, with respect to any dam described in paragraph (1)(A), any tangible property— to enable the delivery of electricity from such dam to any customer, and which satisfies the requirements under clauses (ii) and (iii) of section 48(a)(8)(B). 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. 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.