Maintaining and Enhancing Hydroelectricity and River Restoration Act of 2021
This bill allows a new tax credit for maintaining and enhancing hydroelectric dams that is equal to 30% of the basis of any qualified dam safety, environmental, and grid resilience enhancement property placed in service in a taxable year. It also allows a 30% credit for qualified obsolete river obstruction removal expenditures for demolishing and removing certain nonpowered or hydroelectric dams.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4499 Introduced in House (IH)]
<DOC>
117th CONGRESS
1st Session
H. R. 4499
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 HOUSE OF REPRESENTATIVES
July 16, 2021
Mr. Young (for himself, Ms. Kuster, Mr. Fitzpatrick, and Ms. DelBene)
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 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.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Maintaining and Enhancing
Hydroelectricity and River Restoration Act of 2021''.
SEC. 2. CREDIT FOR MAINTAINING AND ENHANCING HYDROELECTRIC DAMS.
(a) In General.--Subpart E of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by adding after section
48C the following new section:
``SEC. 48D. CREDIT FOR MAINTAINING AND ENHANCING HYDROELECTRIC DAMS.
``(a) In General.--For purposes of section 46, the credit for
maintaining and enhancing hydroelectric dams for any taxable year is 30
percent of the basis of any qualified dam safety, environmental, and
grid resilience enhancement property placed in service during such
taxable year.
``(b) Limitation.--No credit shall be allowed under subsection (a)
with respect to any qualified dam safety, environmental, and grid
resilience property unless the qualified dam in connection with which
such property was placed in service meets all applicable Federal,
State, and tribal requirements with respect to such dam on the date
such property is placed in service.
``(c) 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).
``(d) Definitions.--For purposes of this section--
``(1) Qualified dam safety, environmental, and grid
resilience property.--The term `qualified dam safety,
environmental, and grid resilience enhancement property' means
any property--
``(A) which is--
``(i) dam safety property,
``(ii) environmental improvement property,
or
``(iii) grid resilience property,
``(B)(i) the construction, reconstruction, or
erection of which is completed by the taxpayer, or
``(ii) which is acquired by the taxpayer if the
original use of such property commences with the
taxpayer, and
``(C) with respect to which depreciation (or
amortization in lieu of depreciation) is allowable.
``(2) Dam safety property.--The term `dam safety property'
means property the purpose of which is to maintain or improve
dam safety on a qualified dam to ensure acceptable performance
under all loading conditions (static, hydrologic, seismic) in
accordance with applicable regulatory criteria and risk
guidelines, including--
``(A) the maintenance or upgrade of spillways or
other appurtuant structures,
``(B) dam stability, including erosion repair and
enhanced seepage controls, and
``(C) upgrades or replacements of floodgates or
natural infrastructure restoration or protection to
improve flood risk reduction.
``(3) Environmental improvement property.--The term
`environmental improvement property' means property the purpose
of which is to--
``(A) add or improve safe and effective fish
passage, including new or upgraded turbine technology,
fish ladders, fishways, and all other associated
technology, equipment, or other fish passage technology
to a qualified dam,
``(B) maintain or improve the quality of the water
retained or released by a qualified dam,
``(C) promote downstream sediment transport
processes and habitat maintenance with respect to a
qualified dam, or
``(D) provide for or improve recreational access to
the vicinity of a qualified dam, including roads,
trails, boat ingress and egress, flows to improve
recreation, and infrastructure that improves river
recreation opportunity.
``(4) Grid resilience property.--
``(A) In general.--The term `grid resilience
property' means property--
``(i) the purpose of which is to provide
the ability of a hydroelectric facility at a
qualified dam to contribute to electricity grid
resilience and efficiency by--
``(I) adapting more quickly to
changing grid conditions,
``(II) providing ancillary services
(including black start capabilities,
voltage support, and spinning
reserves),
``(III) integrating other variable
sources of electricity generation, or
``(IV) managing accumulated
reservoir sediments, or
``(ii) which is a qualified dam described
in paragraph (5)(B).
``(B) Mitigation and environmental review
requirements.--Such term shall not include any property
described in subparagraph (A)(i) unless any physical or
operational changes instituted in connection with the
activities described in such subparagraph have been
authorized under applicable Federal, State, and tribal
permitting or licensing processes which include
appropriate mitigation conditions arising from
consultation and environmental review under such
processes.
``(5) Qualified dam.--The term `qualified dam' means any of
the following:
``(A) A hydroelectric dam which is licensed by the
Federal Energy Regulatory Commission or legally
operating without such a license and was placed in
service before the date of the enactment of this
section.
``(B) A hydroelectric dam which--
``(i) was licensed by the Federal Energy
Regulatory Commission before December 31, 2020,
``(ii) is under active license from the
Federal Energy Regulatory Commission on the
date of enactment of this section,
``(iii) meets the requirements of
subclauses (I) and (III) of sections
242(b)(1)(B)(ii) of the Energy Policy Act of
2005 (42 U.S.C. 15881),
``(iv) is placed in service on or after the
date of the enactment of this section, and
``(v) does not contribute to atmospheric
pollution.
``(C) Any dam which--
``(i) was placed in service before the date
of the enactment of this section,
``(ii) is operated on such date of
enactment for any beneficial public use except
hydropower generation, and
``(iii) is authorized after such date of
the enactment for hydropower development by the
Federal Energy Regulatory Commission, the
Bureau of Reclamation, or a State, as
appropriate.
``(D) Any dam which was placed in service before
the date of the enactment of this section and which is
a qualified nonpowered dam (as defined in section
34(e)(3) of the Federal Power Act (16 U.S.C. Sec.
823e(e)(3)).
``(e) Elective Payment.--
``(1) In general.--In the case of a taxpayer making an
election (at such time and in such manner as the Secretary may
provide) under this subsection with respect to any portion of
the credit which would (without regard to this subsection) be
determined under this section with respect to such taxpayer,
such taxpayer shall be treated as making a payment against the
tax imposed by subtitle A for the taxable year equal to 100
percent of such amount.
``(2) Timing.--The payment described in subsection (a)
shall be treated as made on the later of the due date of the
return of tax for such taxable year or the date on which such
return is filed.
``(3) Denial of double benefit.--Solely for purposes of
section 38, in the case of a taxpayer making an election under
this subsection, the credit determined under this section shall
be reduced by the amount of the portion of such credit with
respect to which the taxpayer makes such election.
``(4) Application to certain tax-exempt persons.--In the
case of a taxpayer making an election under this subsection,
the credit subject to such an election shall be determined
notwithstanding--
``(A) section 50(b)(3), and
``(B) section 50(b)(4), with respect to an entity
described in section 50(b)(4)(A)(i).
``(f) Special Rule for Property Financed by Subsidized Energy
Financing or Tax-Exempt Bonds.--For purposes of this section, rules
similar to the rules of section 48(a)(4) (determined without regard to
subparagraph (D) thereof) shall apply.''.
(b) Conforming Amendments.--
(1) Section 46 of the Internal Revenue Code of 1986 is
amended by striking ``and'' at the end of paragraph (5), by
striking the period at the end of paragraph (6) and inserting
``, and'', and by adding at the end the following new
paragraph:
``(7) the credit for maintaining and enhancing
hydroelectric dams.''.
(2) Section 49(a)(1)(C) of such Code is amended by striking
``and'' at the end of clause (iv), by striking the period at
the end of clause (v) and inserting ``, and'', and by adding at
the end the following new clause:
``(vi) the basis of any qualified property
taken into account under section 48D(d).''.
(3) Section 50(a)(2)(E) of such Code is amended by striking
``or 48C(b)(2)'' and inserting ``48C(b)(2), or 48D(c)''.
(4) 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 48C the following new item:
``Sec. 48D. Credit for maintaining and enhancing hydroelectric dams.''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act, under rules similar to the rules of section 48(m) of the
Internal Revenue Code of 1986 (as in effect on the day before the date
of the enactment of the Revenue Reconciliation Act of 1990).
SEC. 3. CREDIT FOR OBSOLETE RIVER OBSTRUCTION REMOVAL EXPENDITURES.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by adding after section
45T the following new section:
``SEC. 45U. CREDIT FOR OBSOLETE RIVER OBSTRUCTION REMOVAL EXPENDITURES.
``(a) In General.--For purposes of section 38, the credit for
obsolete river obstruction removal expenditures for any taxable year is
30 percent of the qualified obsolete river obstruction removal
expenditures incurred during such taxable year.
``(b) Qualified Obsolete River Obstruction Removal Expenditures.--
For purposes of this section--
``(1) In general.--The term `qualified obsolete river
obstruction removal expenditures' means any expenditure to
demolish and remove, in whole or in part, any dam described in
paragraph (2) and its associated infrastructure, including all
associated remediation and ecosystem restoration costs, so long
as--
``(A) the work is performed with the consent of the
dam owner, if available, and
``(B) none of the expenses incurred are used to
demolish or remove a federally owned hydroelectric dam.
``(2) Dam described.--A dam is described in this paragraph
if such dam is--
``(A) a qualified nonpowered dam (as defined in
section 34(e)(3) of the Federal Power Act (16 U.S.C.
Sec. 823e(e)(3)), or
``(B) a hydroelectric dam which is not owned by the
Federal government.
``(c) Application to Tax-Exempt Entities.--
``(1) In general.--In the case of qualified obsolete river
obstruction removal expenditures incurred by an eligible
entity, the Secretary shall promulgate regulations to allow the
allocation of the credit under this section to the person
primarily responsible for designing the property in lieu of the
owner of such property, with such person to be treated as the
taxpayer for purposes of this section.
``(2) Eligible entity.--For purposes of this subsection,
the term `eligible entity' means--
``(A) a Federal, State, or local government or a
political subdivision thereof,
``(B) an Indian tribe (as defined in section
45A(c)(6)), or
``(C) an organization described in section 501(c)
and exempt from tax under section 501(a).
``(d) Elective Payment.--
``(1) In general.--In the case of a taxpayer making an
election (at such time and in such manner as the Secretary may
provide) under this subsection with respect to any portion of
the credit which would (without regard to this subsection) be
determined under this section with respect to such taxpayer,
such taxpayer shall be treated as making a payment against the
tax imposed by subtitle A for the taxable year equal to 100
percent of such amount.
``(2) Timing.--The payment described in subsection (a)
shall be treated as made on the later of the due date of the
return of tax for such taxable year or the date on which such
return is filed.
``(3) Denial of double benefit.--Solely for purposes of
section 38, in the case of a taxpayer making an election under
this subsection, the credit determined under this section shall
be reduced by the amount of the portion of such credit with
respect to which the taxpayer makes such election.''.
(b) Conforming Amendments.--
(1) Section 38(b) of the Internal Revenue Code of 1986 is
amended by striking ``plus'' at the end of paragraph (32), by
striking the period at the end of paragraph (33) and inserting
``, plus'', and by adding at the end the following new
paragraph:
``(34) the credit for obsolete river obstruction removal
expenditures under section 45U(a).''.
(2) Section 280C of such Code is amended by adding at the
end the following new subsection:
``(i) Credit for Obsolete River Obstruction Removal Expenditures.--
No deduction shall be allowed for that portion of the expenses
otherwise allowable as a deduction taken into account in determining
the credit under section 45U for the taxable year which is equal to the
amount of the credit determined for such taxable year under section
45U(a).''.
(3) The table of sections for subpart D of part IV of
subchapter A of chapter 1 of such Code is amended by inserting
after the item relating to section 45T the following new item:
``Sec. 45U. Credit for obsolete river obstruction removal
expenditures.''.
(c) Effective Date.--The amendments made by this section shall
apply to any obsolete river obstruction removal expenditures (as
defined in section 45U of the Internal Revenue Code of 1986, as added
by this section) incurred after the date of the enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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