Sponsors (15)
The bill offers a transferable 30% tax credit to lower costs and finance environmental, safety, and rural‑electrification upgrades at hydropower sites, while imposing timing/approval conditions, eligibility limits, added compliance complexity, and increased federal revenue loss.
Owners and operators of qualified hydropower facilities can claim a transferable 30% tax credit for eligible improvement projects placed in service after Dec 31, 2025, substantially lowering upfront project costs.
Small or cash‑constrained owners (including non-taxable entities) can monetize the credit because it is transferable or electively payable, improving access to upfront financing for projects.
Rural communities and local governments benefit from supported environmental and safety upgrades (fish passage, water quality, dam safety, removal of obsolete obstructions), which can improve river health and public safety.
Project owners/taxpayers must obtain written FERC or state/local approval before Jan 1, 2035 to qualify, creating potential regulatory delays and additional administrative burden.
Limiting credit eligibility to property placed in service after Dec 31, 2025 and requiring approvals by 2035 may exclude near‑term or permit‑delayed projects from receiving the credit.
Expanding tax credits increases forgone federal revenue, which could raise fiscal pressure or crowd out other spending priorities for taxpayers.
Based on analysis of 2 sections of legislative text.
Creates a 30% investment tax credit for qualifying hydropower improvement property placed in service after Dec. 31, 2025, with approvals required before Jan. 1, 2035.
Official title: 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 27, 2025 by Maria E. Cantwell · Last progress March 27, 2025
Creates a new 30% investment tax credit for eligible hydropower improvement property placed in service after December 31, 2025, and allows that credit to be claimed as an elective payment or transferred to other taxpayers. Eligible improvements include fish passage, water quality and sediment transport upgrades, dam safety and removal of obsolete river obstructions, public access improvements consistent with FERC licenses or settlements, interconnection, and certain remote dams; most projects must have written approval from FERC or appropriate State/local officials before January 1, 2035. The credit is added to the Internal Revenue Code as section 48F, coordinated with existing tax code rules for investment credits and placed‑in‑service/progress expenditure treatment, and the bill makes the credit subject to elective payment and transfer mechanisms under sections 6417 and 6418.