S. 1183 — Maintaining and Enhancing Hydroelectricity and River Restoration Act of 2025

This section establishes a new general business tax credit under new IRC §48F (credit for maintaining and enhancing hydroelectric facilities) equal to 30% of the basis of hydropower improvement property placed in service during the taxable year. Hydropower improvement property includes qualified property that (1) adds or improves fish passage, maintains or improves water quality, promotes downstream sediment transport and habitat, upgrades a dam to meet federal safety and security standards, improves public access to waterways consistent with FERC licenses or settlements, removes an obsolete river obstruction (i.e., a qualified nonpowered dam under 16 U.S.C. 823e(e)(3) no longer serving its purpose), or places into service an approved remote dam (i.e., a pre-2021 FERC-licensed hydroelectric dam of ≤20 megawatts serving non-interconnected communities, with no atmospheric pollution and associated interconnection property); and (2) receives prior written approval from FERC or state/local officials before January 1, 2035, with respect to a qualified dam (i.e., FERC-licensed hydroelectric dam or one legally operating without a license before enactment). The section further (1) makes the credit eligible for elective payment under IRC §6417 (with a special election treating certain non-applicable-entity taxpayers as applicable entities solely for this credit for property placed in service after December 31, 2025) and transferability under IRC §6418; and (2) makes conforming amendments to IRC §§46, 49, and 50 to include this credit and property in relevant definitions, recapture rules, and exclusions from at-risk requirements.