I
107TH CONGRESS
1ST SESSION
H. R. 1677
To amend the Internal Revenue Code of 1986 to allow a tax credit for
incremental hydropower for additional generating capacity and increased
efficiency at existing dams licensed by the Federal Energy Regulatory
Commission.
IN THE HOUSE OF REPRESENTATIVES
MAY 2, 2001
Ms. DUNN introduced the following bill; which was referred to the Committee
on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to allow a
tax credit for incremental hydropower for additional gen-
erating capacity and increased efficiency at existing dams
licensed by the Federal Energy Regulatory Commission.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Hydropower Capacity
Improvement Act’’.
SEC. 2. TAX CREDIT FOR INCREMENTAL HYDROPOWER FOR
ADDITIONAL GENERATING CAPACITY AND IN-
CREASED EFFICIENCY AT EXISTING DAMS LI-
CENSED BY THE FEDERAL ENERGY REGU-
LATORY COMMISSION.
(a) CREDIT FOR INCREMENTAL HYDROPOWER.—
(1) IN GENERAL.—Subpart D of part IV of
subchapter A of chapter 1 of the Internal Revenue
Code of 1986 (relating to business credits), is
amended by inserting after section 45D the following
new section:
‘‘SEC. 45E. INCREMENTAL HYDROPOWER CREDIT.
‘‘(a) CREDIT AMOUNT.—For purposes of section 38,
in the case of a qualified entity, the incremental hydro-
power credit is $65 multiplied by the excess of—
‘‘(1) the number of kilowatts of licensed gener-
ating capacity of a qualified hydroelectric facility on
the last day of the taxable year, over
‘‘(2) the licensed kilowatt capacity of such facil-
ity on January 1, 2001.
‘‘(b) DEFINITIONS.—For purposes of this section—
‘‘(1) QUALIFIED ENTITY.—The term ‘qualified
entity’ means any entity that is an owner of a quali-
fied hydroelectric facility.
‘‘(2) QUALIFIED HYDROELECTRIC FACILITY.—
The term ‘qualified hydroelectric facility’ means a
non-Federal hydropower facility in existence on Jan-
uary 1, 2001, and licensed by the Federal Energy
Regulatory Commission.
‘‘(3) INCREMENTAL HYDROPOWER.—The term
‘incremental hydropower’ means additional gener-
ating capacity achieved from increased efficiency or
additions of new capacity at a qualified hydroelectric
facility.
‘‘(c) CREDIT ALLOWED FOR PUBLIC UTILITIES AND
OTHER ENTITIES.—Any credit which would be allowable
under subsection (a) with respect to a qualified hydro-
electric facility of an entity if such entity were not exempt
from tax under this chapter shall be treated as a credit
allowable under subpart C to such entity if such entity
is—
‘‘(1) a public utility,
‘‘(2) an organization described in section
501(c)(12),
‘‘(3) an organization described in section
1381(a)(2)(C), or
‘‘(4) a State, the District of Columbia, any ter-
ritory or possession of the United States, and any
political subdivision thereof.
‘‘(d) CREDIT MAY BE ASSIGNED.—If a qualified en-
tity or an entity described in subsection (c) elects the ap-
plication of this subsection with respect to any qualified
hydroelectric facility for a taxable year, then the amount
of the credit determined under this section with respect
to that facility shall be allowed to any person designated
by the entity and not to the entity.
‘‘(e) TERMINATION.—This section shall not apply to
taxable years beginning after December 31, 2011.’’.
(b) INCLUSION OF INDIAN TRIBAL GOVERNMENTS.—
Section 7871(a)(7) of the Internal Revenue Code of 1986
is amended by striking ‘‘and’’ at the end of subparagraph
(A), by striking the period at the end of subparagraph
(B), and by adding at the end the following:
‘‘(C) section 45E (relating to incremental
hydropower credit).’’.
(c) LIMITATION ON CARRYBACK.—Section 39(d) of
the Internal Revenue Code of 1986 (relating to transition
rules) is amended by adding at the end the following new
paragraph:
‘‘(10) NO CARRYBACK OF INCREMENTAL HY-
DROPOWER CREDIT BEFORE EFFECTIVE DATE.—No
portion of the unused business credit for any taxable
year which is attributable to the incremental hydro-
power credit determined under section 45E may be
carried to a taxable year ending before the date of
the enactment of section 45E.’’.
(d) CONFORMING AMENDMENT.—Section 38(b) of
the Internal Revenue Code of 1986 (relating to general
business credit) is amended by striking ‘‘plus’’ at the end
of paragraph (12), by striking the period at the end of
paragraph (13) and inserting ‘‘, plus’’, and by adding at
the end the following new paragraph:
‘‘(14) the incremental hydropower credit deter-
mined under section 45E.’’.
(e) CLERICAL AMENDMENT.—The table of sections
for subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by in-
serting after the item relating to section 45D the following
new item:
‘‘Sec. 45E. Incremental hydropower credit.’’.
(f) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2001.
Æ