On Aug. 29, the U.S. Treasury Department’s Internal Revenue Service released a proposed rule on provisions of the ABC-opposed Inflation Reduction Act, which will affect the developers, contractors and workers that are building clean energy projects eligible for more than $270 billion in federal tax incentives.
The rule proposes regulations clarifying the applicability of tax incentives for the construction of private clean energy projects funded by the IRA--including solar, wind, hydrogen, carbon sequestration, electric vehicle charging stations and more––conditioned on compliance with government-registered apprenticeship program and prevailing wage requirements.
The proposal also incentivizes the use of anti-competitive and inflationary union-favoring project labor agreements by exempting developers from additional willful penalties for noncompliance with prevailing wage and apprenticeship rules. Of note, controversial PLAs are not required to be mandated by developers via the proposed rule, the initial IRS guidance or in the underlying legislation and remain entirely optional.
The IRS proposed rule comes on the heels of initial inadequate IRS guidance––required to be issued by the IRA statute––that went into effect on Jan. 30, 2023. The initial IRS guidance raised many questions and concerns that the proposed rule and your comments on the proposed rule will help resolve.
ABC members will continue to build clean energy projects with or without enhanced tax incentives, so take action today by submitting comments by 11:59 PM ET on Monday, Oct., 30 that seek regulatory clarity and oppose these unnecessary mandates. Learn more at abc.org/ira.