HR 2160
Maintaining and Enhancing Hydroelectricity and River Restoration Act
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Bill overview
This bill, the Maintaining and Enhancing Hydroelectricity and River Restoration Act, creates a 30% tax credit for upgrades to existing hydroelectric dams. These improvements, which can include fish passage enhancements, dam safety upgrades, and removing obsolete river obstructions, must receive approval from the Federal Energy Regulatory Commission or state/local officials by January 1, 2032. The bill also allows certain entities to treat the credit as a tax payment and transfer it, with specific rules for progress expenses and remote dams.
Key provisions
- Establishes a 30% investment tax credit for hydropower improvement property.
- Defines ‘hydropower improvement property’ as specific dam upgrades and improvements.
- Requires written approval from the FERC or state/local officials for property before January 1, 2032.
- Allows an election to claim the tax credit for progress expenses in advance of property placement.
- Enables entities to treat the credit as a tax payment and transfer it.
- Defines ‘approved remote dam’ with specific criteria.
- Includes provisions for ‘fish passage’ improvements.
- Addresses obsolete river obstructions.
Who is affected
- Taxpayers
- Hydroelectric dam operators
- Federal Energy Regulatory Commission
- State and local governments
- Electric utilities
Notable changes
- Creates a new tax credit specifically for hydroelectric dam improvements.
Sponsors
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Primary sponsor
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119th CONGRESS — 1st Session
H. R. 2160
IN THE HOUSE OF REPRESENTATIVES
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.
This Act may be cited as the Maintaining and Enhancing Hydroelectricity and River Restoration Act
.
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—
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.