Maintaining and Enhancing Hydroelectricity and River Restoration Act of 2022

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. 1. Short title This Act may be cited as the Maintaining and Enhancing Hydroelectricity and River Restoration Act of 2022 2. Credit for maintaining and enhancing hydroelectric facilities (a) In general Subpart E of part IV of subchapter A of chapter 1 Public Law 117–169 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 (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 reached with the Federal Energy Regulatory Commission pursuant 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 (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, and (iii) does not contribute to atmosphere pollution, and (B) any qualified interconnection property (as defined in section 48(a)(8)(B)) associated with a dam described in subparagraph (A) which has a maximum net output of not greater than 20 megawatts. (2) Fish passage The term fish passage (3) Obsolete river obstruction The term obsolete river obstruction 16 U.S.C. 823e(e)(3) (4) Qualified dam The term qualified dam . (b) Elective payment and transfer of credit (1) Elective payment Section 6417 Public Law 117–169 (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) (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) Public Law 117–169 (xii) The credit for maintaining and enhancing hydroelectric facilities under section 48F. . (c) Conforming amendments (1) Section 46 Public Law 117–169 (A) in paragraph (6), by striking and (B) in paragraph (7), by striking the period at the end and inserting , 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, as amended by section 13702(b)(2) of Public Law 117–169 (A) in clause (vii), by striking and (B) in clause (viii), by striking the period at the end and inserting , 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 or 48E(e) 48E(e), or 48F(b) (B) in subsection (d)(2), as amended by section 13102(f)(5) of Public Law 117–169 (i) in the matter preceding subparagraph (A), by inserting or any hydropower improvement property (as defined in section 48F(c)) any energy storage technology (as defined in section 48(c)(6)) (ii) in subparagraph (B), by striking energy storage technology 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, as amended by section 13702(b)(5) of Public Law 117–169 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.

Summary: Maintaining and Enhancing Hydroelectricity and River Restoration Act of 2022 This bill allows a new investment tax credit for 30% of the basis of any hydropower improvement property. The bill defines such property as property that, amount other things (1) adds or improves fish passage at a qualified dam (i.e., a hydroelectric dam licensed by the Federal Energy Regulatory Commission or legally operating without such a license before the enactment of this bill); (2) maintains or improves the quality of the water retained or released by such a dam; (3) promotes downstream sediment transport processes and habitat maintenance for such a dam; (4) removes an obsolete river obstruction; or (5) places into service an approved remote dam (i.e., a hydroelectric dam that services certain communities and does not contribute to atmosphere pollution).