The U.S. Department of the Treasury has recently released a proposed rulemaking related to prevailing wage and apprenticeship (PWA) requirements for increased tax credits. This initiative has been established by the Inflation Reduction Act of 2022 (IRA), and includes an increase in the investment tax credit under section 48 of the Internal Revenue Code (ITC), the production tax credit under section 45 (PTC), among others.
The proposal, as described in an article on JD Supra, aims to shed light on the Treasury’s interpretation and application of the PWA requirements. Legal professionals working in global corporations and law firms might be especially interested in several key points of these proposed regulations.
- The definition of “construction”, which could impact the applicability of PWA requirements.
- The impact of these requirements on existing contracts, including questions around whether modifications to such contracts would trigger the new PWA requirements.
- The treatment of various types of energy generation facilities.
It is important to bear in mind the potential implications the finalized rules could have on ongoing and future energy development projects. Those in the legal field, especially those advising on corporate and tax matters, would do well to monitor these developments closely as they could significantly influence the structuring and financing of such projects.
While these proposed regulations are open for public comment, now is the time for corporations, law firms, and others with a vested interest to voice any questions, concerns or suggestions.