Sponsors (19)
The bill subsidizes eligible dam and hydropower upgrades to lower costs, improve environmental and safety outcomes, and spur local recreation economies, but it reduces federal revenue, may unevenly benefit well‑capitalized actors, excludes some projects through narrow eligibility, and adds administrative approvals that can delay implementation.
Owners of qualifying hydropower facilities (including public utilities and municipalities) can claim a 30% investment tax credit and may elect direct payment or transfer, lowering upfront costs and making upgrades easier to finance.
Rural communities, local governments, and river ecosystems will receive funding for environmental and dam-safety upgrades (fish passage, water quality, sediment transport, dam safety), improving ecosystem health and public safety near dams.
Recreation users and nearby local economies will benefit from incentives to remove obsolete river obstructions and improve public access, which can boost tourism, outdoor recreation, and local economic activity.
Federal taxpayers will see reduced federal tax revenue because the 30% credit lowers tax receipts, which could increase the deficit or crowd out other spending without offsets.
Ratepayers and local communities risk not receiving proportionate benefit because monetization of the credit through transfer or direct payment may primarily benefit well‑capitalized developers or investors, raising distributional fairness concerns.
Many small or legacy hydropower projects and some remote dams may be excluded by narrow eligibility rules (e.g., FERC licensing dates, ≤20 MW limits, non‑interconnected requirements), leaving some rural communities and utilities unable to access the credit.
Based on analysis of 2 sections of legislative text.
Creates a 30% investment tax credit for qualifying hydropower improvement property and river-restoration measures placed in service after Dec 31, 2022, with elective direct-pay and transferability.
Official title: 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.
Introduced March 14, 2025 by Adrian Smith · Last progress March 14, 2025
Creates a new 30% investment tax credit for certain hydropower improvement property and river-restoration investments placed in service after Dec 31, 2022, including fish passage, water-quality and sediment measures, dam safety upgrades, removal of obsolete obstructions, public access improvements, and approved remote-dam projects. The credit can be elected as a direct payment or transferred under modified sections of the Internal Revenue Code and requires written approval from FERC or appropriate state/local officials before Jan 1, 2032. Defines terms (approved remote dam, fish passage, interconnection property, obsolete river obstruction, qualified dam), applies progress-expenditure rules like earlier investment-credit rules, and amends related tax-code provisions so the new credit integrates with existing credit rules and elective payment/transfer mechanisms.