A wide array of construction/design industry groups joined together to address concerns regarding Treasury’s Notice of Proposed Rulemaking, Increased Credit or Deduction Amounts for Satisfying Certain Prevailing Wage and Apprenticeship Requirements. The rulemaking proposes regulations clarifying the applicability of tax credits for the construction of private clean energy projects funded by the “Inflation Reduction Act” (hereinafter IRA)––including solar, wind, hydrogen, carbon sequestration, electric vehicle charging stations and more––conditioned on compliance with controversial expansion of prevailing wage and government-registered apprenticeship requirements. [Accordingly, project developers who satisfy these regulations are eligible for a 500% increase in tax credits compared to baseline tax credits offered to developers under previous regulations].
The coalition’s comments point out, clean energy developers are not required to mandate the use of PLAs in order to receive enhanced tax credits, but the coalition believes this new and overly expansive policy proposal (which was not included in the IRA statute or initial IRS guidance -- will coerce developers into mandating PLAs to avoid extreme penalties for violating new and disruptive labor policies. This is a remarkable expansion of pro-PLA policy onto private construction projects using a novel approach through the U.S. tax code. The organizations in the coalition have engaged in the rulemaking process in order to preserve “a record below” for any possible future legal actions.
For further information, see coalition letter on this matter Opposing PLA Requirements.