Sponsors (19)
The bill provides a large tax credit and monetization tools to lower costs and speed financing for qualifying hydropower and river-restoration work, trading broader environmental and economic support for increased federal revenue costs, administrative approval requirements, and eligibility limits that may leave some communities and low-liability entities behind.
Owners and operators of qualifying hydropower projects (including utilities and project sponsors) receive a new 30% investment tax credit and can elect payment or transfer options, lowering upfront costs and making projects easier to finance.
Rural and local communities benefit from funded upgrades and removals (fish passage, water quality, sediment transport, dam safety, removal of obsolete river obstructions, and public access improvements) that can restore ecosystems, improve recreation, and enhance public safety.
Small businesses and public entities are better able to monetize credits through the elective payment/transfer provisions, improving access to financing for smaller or publicly owned projects that otherwise struggle to use tax credits.
Taxpayers and small project sponsors with little or no federal tax liability may not fully benefit because the credit is nonrefundable unless monetized, leaving some unable to realize the full value.
Expanding a 30% tax credit increases federal tax expenditures and will likely reduce federal revenue, potentially widening deficits or crowding out other spending unless offsets are provided.
Requiring written approval from FERC or state/local officials for certain projects before 1/1/2032 adds administrative steps that could delay projects or impose additional burdens on applicants (utilities, local governments, small sponsors).
Based on analysis of 2 sections of legislative text.
Creates a 30% tax credit for qualifying hydropower improvement property, with defined eligible investments, approval requirements, and elective payment/transfer options.
Introduced March 14, 2025 by Adrian Smith · Last progress March 14, 2025
Creates a new federal tax credit equal to 30% of the basis of qualifying hydropower improvement property placed in service, aimed at supporting dam safety, fish passage, water quality, sediment management, removal of obsolete river obstructions, public access, and related interconnection work. The credit includes progress-expenditure rules, requires written approval by FERC or the appropriate State/local official for eligible projects before January 1, 2032, and is eligible for elective payment or transfer under specified tax-code mechanisms. The change applies to property placed in service after December 31, 2022.