Creates a federal investment tax credit equal to 30% of the basis of qualified hydropower improvement property placed in service after December 31, 2025. Eligible work includes fish passage, water-quality projects, dam safety upgrades, removal of obsolete obstructions, and bringing approved small remote dams into service; projects need written approval before January 1, 2035. The credit includes rules for elective payment (direct payment) and credit transfer to allow monetization and makes related changes to the Internal Revenue Code.