Maintaining and Enhancing Hydroelectricity and River Restoration Act of 2022
This bill allows a new investment tax credit for 30% of the basis of any hydropower improvement property. The bill defines such property as property that, amount other things (1) adds or improves fish passage at a qualified dam (i.e., a hydroelectric dam licensed by the Federal Energy Regulatory Commission or legally operating without such a license before the enactment of this bill); (2) maintains or improves the quality of the water retained or released by such a dam; (3) promotes downstream sediment transport processes and habitat maintenance for such a dam; (4) removes an obsolete river obstruction; or (5) places into service an approved remote dam (i.e., a hydroelectric dam that services certain communities and does not contribute to atmosphere pollution).
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.

    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 2022''.

SEC. 2. CREDIT FOR MAINTAINING AND ENHANCING HYDROELECTRIC FACILITIES.

    (a) In General.--Subpart E of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986, as amended by section 13702 of 
Public Law 117-169, is amended by inserting after section 48E the 
following new section:

``SEC. 48F. CREDIT FOR MAINTAINING AND ENHANCING HYDROELECTRIC 
              FACILITIES.

    ``(a) In General.--For purposes of section 46, the credit for 
maintaining and enhancing hydroelectric facilities for any taxable year 
is an amount equal to 30 percent of the basis of any hydropower 
improvement property placed in service during such taxable year.
    ``(b) 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).
    ``(c) Hydropower Improvement Property.--In this section, the term 
`hydropower improvement property' means property--
            ``(1) which--
                    ``(A) adds or improves fish passage at a qualified 
                dam,
                    ``(B) maintains or improves the quality of the 
                water retained or released by a qualified dam,
                    ``(C) promotes downstream sediment transport 
                processes and habitat maintenance with respect to a 
                qualified dam,
                    ``(D) upgrades, repairs, or reconstructs a 
                qualified dam to meet Federal dam safety and security 
                standards,
                    ``(E) improves the public uses of, and access to, 
                public waterways impacted by a qualified dam in a 
                manner consistent with a license issued by the Federal 
                Energy Regulatory Commission or a settlement agreement 
                reached with the Federal Energy Regulatory Commission 
                pursuant to such a license,
                    ``(F) removes an obsolete river obstruction, or
                    ``(G) places into service an approved remote dam, 
                and
            ``(2) for which, prior to January 1, 2032, the taxpayer 
        receives written approval with respect to any property 
        described in paragraph (1) from the Federal Energy Regulatory 
        Commission or State or local officials, as appropriate.
    ``(d) Other Definitions.--In this section--
            ``(1) Approved remote dam.--The term `approved remote dam' 
        means--
                    ``(A) a hydroelectric dam which--
                            ``(i) exclusively services communities not 
                        interconnected to the Electric Reliability 
                        Council of Texas, the Eastern Interconnection, 
                        or the Western Interconnection,
                            ``(ii) was licensed by the Federal Energy 
                        Regulatory Commission before December 31, 2020, 
                        and
                            ``(iii) does not contribute to atmosphere 
                        pollution, and
                    ``(B) any qualified interconnection property (as 
                defined in section 48(a)(8)(B)) associated with a dam 
                described in subparagraph (A) which has a maximum net 
                output of not greater than 20 megawatts.
            ``(2) Fish passage.--The term `fish passage' means, with 
        respect to any qualified dam, any new or upgraded turbine, 
        fishway, or other fish passage technology which improves fish 
        migration and survival rates.
            ``(3) Obsolete river obstruction.--The term `obsolete river 
        obstruction' means a qualified nonpowered dam (as defined in 
        section 34(e)(3) of the Federal Power Act (16 U.S.C. 
        823e(e)(3))) no longer serving its intended purpose.
            ``(4) Qualified dam.--The term `qualified dam' means a 
        hydroelectric dam that is licensed by the Federal Energy 
        Regulatory Commission or legally operating without such a 
        license before the date of enactment of this section.''.
    (b) Elective Payment and Transfer of Credit.--
            (1) Elective payment.--Section 6417 of the Internal Revenue 
        Code of 1986, as added by section 13801(a) of Public Law 117-
        169, is amended--
                    (A) in subsection (b), by adding at the end the 
                following:
            ``(13) The credit for maintaining and enhancing 
        hydroelectric facilities under section 48F.'', and
                    (B) in subsection (d)(1)--
                            (i) in subparagraph (E), by striking ``(C), 
                        or (D)'' each place it appears and inserting 
                        ``(C), (D), or (E)'',
                            (ii) by redesignating subparagraph (E) (as 
                        amended by clause (i)) as subparagraph (F), and
                            (iii) by inserting after subparagraph (D) 
                        the following:
                    ``(E) Election with respect to credit for 
                maintaining and enhancing hydroelectric facilities.--If 
                a taxpayer other than an entity described in 
                subparagraph (A) makes an election under this 
                subparagraph with respect to any taxable year in which 
                such taxpayer has, after December 31, 2022, placed in 
                service hydropower improvement property (as defined in 
                section 48F(c)), such taxpayer shall be treated as an 
                applicable entity for purposes of this section for such 
                taxable year, but only with respect to the credit 
                described in subsection (b)(13).''.
            (2) Transfer.--Section 6418(f)(1)(A) of the Internal 
        Revenue Code of 1986, as added by section 13801(b) of Public 
        Law 117-169, is amended by adding at the end the following:
                            ``(xii) The credit for maintaining and 
                        enhancing hydroelectric facilities under 
                        section 48F.''.
    (c) Conforming Amendments.--
            (1) Section 46 of the Internal Revenue Code of 1986, as 
        amended by section 13702(b)(1) of Public Law 117-169, is 
        amended--
                    (A) in paragraph (6), by striking ``and'' at the 
                end,
                    (B) in paragraph (7), by striking the period at the 
                end and inserting ``, and'', and
                    (C) by adding at the end the following:
            ``(8) the credit for maintaining and enhancing 
        hydroelectric facilities.''.
            (2) Section 49(a)(1)(C) of such Code, as amended by section 
        13702(b)(2) of Public Law 117-169, is amended--
                    (A) in clause (vii), by striking ``and'' at the 
                end,
                    (B) in clause (viii), by striking the period at the 
                end and inserting ``, and'', and
                    (C) by adding at the end the following:
                            ``(ix) the basis of any hydropower 
                        improvement property under section 48F.''.
            (3) Section 50 of such Code is amended--
                    (A) in subsection (a)(2)(E), as amended by section 
                13702(b) of Public Law 117-169, by striking ``or 
                48E(e)'' and inserting ``48E(e), or 48F(b)'', and
                    (B) in subsection (d)(2), as amended by section 
                13102(f)(5) of Public Law 117-169--
                            (i) in the matter preceding subparagraph 
                        (A), by inserting ``or any hydropower 
                        improvement property (as defined in section 
                        48F(c))'' after ``any energy storage technology 
                        (as defined in section 48(c)(6))'', and
                            (ii) in subparagraph (B), by striking 
                        ``energy storage technology'' each place it 
                        appears and inserting ``energy storage 
                        technology or hydropower improvement 
                        property''.
            (4) The table of sections for subpart E of part IV of 
        subchapter A of chapter 1 of such Code, as amended by section 
        13702(b)(5) of Public Law 117-169, is amended by inserting 
        after the item relating to section 48E the following new item:

``Sec. 48F. Credit for maintaining and enhancing hydroelectric 
                            facilities.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2022.
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Maintaining and Enhancing Hydroelectricity and River Restoration Act of 2022
A bill 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.
Maintaining and Enhancing Hydroelectricity and River Restoration Act of 2022
Sen. Cantwell, Maria