II 

117TH CONGRESS 

1ST SESSION S. 2306 

To amend the Internal Revenue Code of 1986 to support upgrades at existing 

hydroelectric dams and the removal of obsolete river obstructions to 

improve the health of the Nation’s rivers and associated wildlife habitat 

and increase clean energy production, public safety, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 24, 2021 

Ms. CANTWELL (for herself and Ms. MURKOWSKI) 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 and the removal 

of obsolete river obstructions to improve the health of 

the Nation’s rivers and associated wildlife habitat and 

increase clean energy production, public safety, and for 

other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Maintaining and En5 hancing Hydroelectricity and River Restoration Act of 

6 2021’’. 


kjohnson on DSK79L0C42PROD with BILLS
2 

•S 2306 IS

1 SEC. 2. CREDIT FOR MAINTAINING AND ENHANCING HY2 DROELECTRIC DAMS. 

3 (a) IN GENERAL.—Subpart E of part IV of sub4 chapter A of chapter 1 of the Internal Revenue Code of 

5 1986 is amended by adding after section 48C the following 

6 new section: 

7 ‘‘SEC. 48D. CREDIT FOR MAINTAINING AND ENHANCING HY8 DROELECTRIC DAMS. 

9 ‘‘(a) IN GENERAL.—For purposes of section 46, the 

10 credit for maintaining and enhancing hydroelectric dams 

11 for any taxable year is 30 percent of the basis of any quali12 fied dam safety, environmental, and grid resilience en13 hancement property placed in service during such taxable 

14 year. 

15 ‘‘(b) LIMITATION.—No credit shall be allowed under 

16 subsection (a) with respect to any qualified dam safety, 

17 environmental, and grid resilience property unless the 

18 qualified dam in connection with which such property was 

19 placed in service meets all applicable Federal, State, and 

20 tribal requirements with respect to such dam on the date 

21 such property is placed in service. 

22 ‘‘(c) CERTAIN PROGRESS EXPENDITURE RULES

23 MADE APPLICABLE.—Rules similar to the rules of sub24 sections (c)(4) and (d) of section 46 (as in effect on the 

25 day before the date of the enactment of the Revenue RecVerDate Sep 11 2014 07:37 Jul 09, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2306.IS S2306

kjohnson on DSK79L0C42PROD with BILLS
3 

•S 2306 IS

1 onciliation Act of 1990) shall apply for purposes of sub2 section (a). 

3 ‘‘(d) DEFINITIONS.—For purposes of this section— 

4 ‘‘(1) QUALIFIED DAM SAFETY, ENVIRON5 MENTAL, AND GRID RESILIENCE PROPERTY.—The 

6 term ‘qualified dam safety, environmental, and grid 

7 resilience enhancement property’ means any prop8 erty— 

9 ‘‘(A) which is— 

10 ‘‘(i) dam safety property, 

11 ‘‘(ii) environmental improvement 

12 property, or 

13 ‘‘(iii) grid resilience property, 

14 ‘‘(B)(i) the construction, reconstruction, or 

15 erection of which is completed by the taxpayer, 

16 or 

17 ‘‘(ii) which is acquired by the taxpayer if 

18 the original use of such property commences 

19 with the taxpayer, and 

20 ‘‘(C) with respect to which depreciation (or 

21 amortization in lieu of depreciation) is allow22 able. 

23 ‘‘(2) DAM SAFETY PROPERTY.—The term ‘dam 

24 safety property’ means property the purpose of 

25 which is to maintain or improve dam safety on a 


kjohnson on DSK79L0C42PROD with BILLS
4 

•S 2306 IS

1 qualified dam to ensure acceptable performance 

2 under all loading conditions (static, hydrologic, seis3 mic) in accordance with applicable regulatory cri4 teria and risk guidelines, including— 

5 ‘‘(A) the maintenance or upgrade of spill6 ways or other appurtuant structures, 

7 ‘‘(B) dam stability, including erosion re8 pair and enhanced seepage controls, and 

9 ‘‘(C) upgrades or replacements of flood10 gates or natural infrastructure restoration or 

11 protection to improve flood risk reduction. 

12 ‘‘(3) ENVIRONMENTAL IMPROVEMENT PROP13 ERTY.—The term ‘environmental improvement prop14 erty’ means property the purpose of which is to— 

15 ‘‘(A) add or improve safe and effective fish 

16 passage, including new or upgraded turbine 

17 technology, fish ladders, fishways, and all other 

18 associated technology, equipment, or other fish 

19 passage technology to a qualified dam, 

20 ‘‘(B) maintain or improve the quality of 

21 the water retained or released by a qualified 

22 dam, 

23 ‘‘(C) promote downstream sediment trans24 port processes and habitat maintenance with re25 spect to a qualified dam, or 


kjohnson on DSK79L0C42PROD with BILLS
5 

•S 2306 IS

1 ‘‘(D) provide for or improve recreational 

2 access to the vicinity of a qualified dam, includ3 ing roads, trails, boat ingress and egress, flows 

4 to improve recreation, and infrastructure that 

5 improves river recreation opportunity. 

6 ‘‘(4) GRID RESILIENCE PROPERTY.— 

7 ‘‘(A) IN GENERAL.—The term ‘grid resil8 ience property’ means property— 

9 ‘‘(i) the purpose of which is to provide 

10 the ability of a hydroelectric facility at a 

11 qualified dam to contribute to electricity 

12 grid resilience and efficiency by— 

13 ‘‘(I) adapting more quickly to 

14 changing grid conditions, 

15 ‘‘(II) providing ancillary services 

16 (including black start capabilities, 

17 voltage support, and spinning re18 serves), 

19 ‘‘(III) integrating other variable 

20 sources of electricity generation, or 

21 ‘‘(IV) managing accumulated res22 ervoir sediments, or 

23 ‘‘(ii) which is a qualified dam de24 scribed in paragraph (5)(B). 


kjohnson on DSK79L0C42PROD with BILLS
6 

•S 2306 IS

1 ‘‘(B) MITIGATION AND ENVIRONMENTAL

2 REVIEW REQUIREMENTS.—Such term shall not 

3 include any property described in subparagraph 

4 (A)(i) unless any physical or operational 

5 changes instituted in connection with the activi6 ties described in such subparagraph have been 

7 authorized under applicable Federal, State, and 

8 tribal permitting or licensing processes which 

9 include appropriate mitigation conditions aris10 ing from consultation and environmental review 

11 under such processes. 

12 ‘‘(5) QUALIFIED DAM.—The term ‘qualified 

13 dam’ means any of the following: 

14 ‘‘(A) A hydroelectric dam which is licensed 

15 by the Federal Energy Regulatory Commission 

16 or legally operating without such a license and 

17 was placed in service before the date of the en18 actment of this section. 

19 ‘‘(B) A hydroelectric dam which— 

20 ‘‘(i) was licensed by the Federal En21 ergy Regulatory Commission before De22 cember 31, 2020, 

23 ‘‘(ii) is under active license from the 

24 Federal Energy Regulatory Commission on 

25 the date of enactment of this section, 


kjohnson on DSK79L0C42PROD with BILLS
7 

•S 2306 IS

1 ‘‘(iii) meets the requirements of sub2 clauses (I) and (III) of sections 

3 242(b)(1)(B)(ii) of the Energy Policy Act 

4 of 2005 (42 U.S.C. 15881), 

5 ‘‘(iv) is placed in service on or after 

6 the date of the enactment of this section, 

7 and 

8 ‘‘(v) does not contribute to atmos9 pheric pollution. 

10 ‘‘(C) Any dam which— 

11 ‘‘(i) was placed in service before the 

12 date of the enactment of this section, 

13 ‘‘(ii) is operated on such date of en14 actment for any beneficial public use ex15 cept hydropower generation, and 

16 ‘‘(iii) is authorized after such date of 

17 the enactment for hydropower development 

18 by the Federal Energy Regulatory Com19 mission, the Bureau of Reclamation, or a 

20 State, as appropriate. 

21 ‘‘(D) Any dam which was placed in service 

22 before the date of the enactment of this section 

23 and which is a qualified nonpowered dam (as 

24 defined in section 34(e)(3) of the Federal 

25 Power Act (16 U.S.C. § 823e(e)(3)). 


kjohnson on DSK79L0C42PROD with BILLS
8 

•S 2306 IS

1 ‘‘(e) ELECTIVE PAYMENT.— 

2 ‘‘(1) IN GENERAL.—In the case of a taxpayer 

3 making an election (at such time and in such man4 ner as the Secretary may provide) under this sub5 section with respect to any portion of the credit 

6 which would (without regard to this subsection) be 

7 determined under this section with respect to such 

8 taxpayer, such taxpayer shall be treated as making 

9 a payment against the tax imposed by subtitle A for 

10 the taxable year equal to 100 percent of such 

11 amount. 

12 ‘‘(2) TIMING.—The payment described in sub13 section (a) shall be treated as made on the later of 

14 the due date of the return of tax for such taxable 

15 year or the date on which such return is filed. 

16 ‘‘(3) DENIAL OF DOUBLE BENEFIT.—Solely for 

17 purposes of section 38, in the case of a taxpayer 

18 making an election under this subsection, the credit 

19 determined under this section shall be reduced by 

20 the amount of the portion of such credit with respect 

21 to which the taxpayer makes such election. 

22 ‘‘(4) APPLICATION TO CERTAIN TAX-EXEMPT

23 PERSONS.—In the case of a taxpayer making an 

24 election under this subsection, the credit subject to 


kjohnson on DSK79L0C42PROD with BILLS
9 

•S 2306 IS

1 such an election shall be determined notwith2 standing— 

3 ‘‘(A) section 50(b)(3), and 

4 ‘‘(B) section 50(b)(4), with respect to an 

5 entity described in section 50(b)(4)(A)(i). 

6 ‘‘(f) SPECIAL RULE FOR PROPERTY FINANCED BY

7 SUBSIDIZED ENERGY FINANCING OR TAX-EXEMPT

8 BONDS.—For purposes of this section, rules similar to the 

9 rules of section 48(a)(4) (determined without regard to 

10 subparagraph (D) thereof) shall apply.’’. 

11 (b) CONFORMING AMENDMENTS.— 

12 (1) Section 46 of the Internal Revenue Code of 

13 1986 is amended by striking ‘‘and’’ at the end of 

14 paragraph (5), by striking the period at the end of 

15 paragraph (6) and inserting ‘‘, and’’, and by adding 

16 at the end the following new paragraph: 

17 ‘‘(7) the credit for maintaining and enhancing 

18 hydroelectric dams.’’. 

19 (2) Section 49(a)(1)(C) of such Code is amend20 ed by striking ‘‘and’’ at the end of clause (iv), by 

21 striking the period at the end of clause (v) and in22 serting ‘‘, and’’, and by adding at the end the fol23 lowing new clause: 


kjohnson on DSK79L0C42PROD with BILLS
10 

•S 2306 IS

1 ‘‘(vi) the basis of any qualified prop2 erty taken into account under section 

3 48D(d).’’. 

4 (3) Section 50(a)(2)(E) of such Code is amend5 ed by striking ‘‘or 48C(b)(2)’’ and inserting 

6 ‘‘48C(b)(2), or 48D(c)’’. 

7 (4) The table of sections for subpart E of part 

8 IV of subchapter A of chapter 1 of such Code is 

9 amended by inserting after the item relating to sec10 tion 48C the following new item: 

‘‘Sec. 48D. Credit for maintaining and enhancing hydroelectric dams.’’. 

11 (c) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to property placed in service after 

13 the date of the enactment of this Act, under rules similar 

14 to the rules of section 48(m) of the Internal Revenue Code 

15 of 1986 (as in effect on the day before the date of the 

16 enactment of the Revenue Reconciliation Act of 1990). 

17 SEC. 3. CREDIT FOR OBSOLETE RIVER OBSTRUCTION RE18 MOVAL EXPENDITURES. 

19 (a) IN GENERAL.—Subpart D of part IV of sub20 chapter A of chapter 1 of the Internal Revenue Code of 

21 1986 is amended by adding after section 45T the following 

22 new section: 


kjohnson on DSK79L0C42PROD with BILLS
11 

•S 2306 IS

1 ‘‘SEC. 45U. CREDIT FOR OBSOLETE RIVER OBSTRUCTION 

2 REMOVAL EXPENDITURES. 

3 ‘‘(a) IN GENERAL.—For purposes of section 38, the 

4 credit for obsolete river obstruction removal expenditures 

5 for any taxable year is 30 percent of the qualified obsolete 

6 river obstruction removal expenditures incurred during 

7 such taxable year. 

8 ‘‘(b) QUALIFIED OBSOLETE RIVER OBSTRUCTION

9 REMOVAL EXPENDITURES.—For purposes of this sec10 tion— 

11 ‘‘(1) IN GENERAL.—The term ‘qualified obso12 lete river obstruction removal expenditures’ means 

13 any expenditure to demolish and remove, in whole or 

14 in part, any dam described in paragraph (2) and its 

15 associated infrastructure, including all associated re16 mediation and ecosystem restoration costs, so long 

17 as— 

18 ‘‘(A) the work is performed with the con19 sent of the dam owner, if available, and 

20 ‘‘(B) none of the expenses incurred are 

21 used to demolish or remove a Federally-owned 

22 hydroelectric dam. 

23 ‘‘(2) DAM DESCRIBED.—A dam is described in 

24 this paragraph if such dam is— 


kjohnson on DSK79L0C42PROD with BILLS
12 

•S 2306 IS

1 ‘‘(A) a qualified nonpowered dam (as de2 fined in section 34(e)(3) of the Federal Power 

3 Act (16 U.S.C. § 823e(e)(3)), or 

4 ‘‘(B) a hydroelectric dam which is not 

5 owned by the Federal government. 

6 ‘‘(c) APPLICATION TO TAX-EXEMPT ENTITIES.— 

7 ‘‘(1) IN GENERAL.—In the case of qualified ob8 solete river obstruction removal expenditures in9 curred by an eligible entity, the Secretary shall pro10 mulgate regulations to allow the allocation of the 

11 credit under this section to the person primarily re12 sponsible for designing the property in lieu of the 

13 owner of such property, with such person to be 

14 treated as the taxpayer for purposes of this section. 

15 ‘‘(2) ELIGIBLE ENTITY.—For purposes of this 

16 subsection, the term ‘eligible entity’ means— 

17 ‘‘(A) a Federal, State, or local government 

18 or a political subdivision thereof, 

19 ‘‘(B) an Indian tribe (as defined in section 

20 45A(c)(6)), or 

21 ‘‘(C) an organization described in section 

22 501(c) and exempt from tax under section 

23 501(a). 

24 ‘‘(d) ELECTIVE PAYMENT.— 


kjohnson on DSK79L0C42PROD with BILLS
13 

•S 2306 IS

1 ‘‘(1) IN GENERAL.—In the case of a taxpayer 

2 making an election (at such time and in such man3 ner as the Secretary may provide) under this sub4 section with respect to any portion of the credit 

5 which would (without regard to this subsection) be 

6 determined under this section with respect to such 

7 taxpayer, such taxpayer shall be treated as making 

8 a payment against the tax imposed by subtitle A for 

9 the taxable year equal to 100 percent of such 

10 amount. 

11 ‘‘(2) TIMING.—The payment described in sub12 section (a) shall be treated as made on the later of 

13 the due date of the return of tax for such taxable 

14 year or the date on which such return is filed. 

15 ‘‘(3) DENIAL OF DOUBLE BENEFIT.—Solely for 

16 purposes of section 38, in the case of a taxpayer 

17 making an election under this subsection, the credit 

18 determined under this section shall be reduced by 

19 the amount of the portion of such credit with respect 

20 to which the taxpayer makes such election.’’. 

21 (b) CONFORMING AMENDMENTS.— 

22 (1) Section 38(b) of the Internal Revenue Code 

23 of 1986 is amended by striking ‘‘plus’’ at the end of 

24 paragraph (32), by striking the period at the end of 


kjohnson on DSK79L0C42PROD with BILLS
14 

•S 2306 IS

1 paragraph (33) and inserting ‘‘, plus’’, and by add2 ing at the end the following new paragraph: 

3 ‘‘(34) the credit for obsolete river obstruction 

4 removal expenditures under section 45U(a).’’. 

5 (2) Section 280C of such Code is amended by 

6 adding at the end the following new subsection: 

7 ‘‘(i) CREDIT FOR OBSOLETE RIVER OBSTRUCTION

8 REMOVAL EXPENDITURES.—No deduction shall be al9 lowed for that portion of the expenses otherwise allowable 

10 as a deduction taken into account in determining the cred11 it under section 45U for the taxable year which is equal 

12 to the amount of the credit determined for such taxable 

13 year under section 45U(a).’’. 

14 (3) The table of sections for subpart D of part 

15 IV of subchapter A of chapter 1 of such Code is 

16 amended by inserting after the item relating to sec17 tion 45T the following new item: 

‘‘Sec. 45U. Credit for obsolete river obstruction removal expenditures.’’. 

18 (c) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to any obsolete river obstruction 

20 removal expenditures (as defined in section 45U of the In21 ternal Revenue Code of 1986, as added by this section) 

22 incurred after the date of the enactment of this Act. 

Æ 


kjohnson on DSK79L0C42PROD with BILLS