DEPARTMENT OF THE TREASURY

WASHINGTON, D.C. 20220

August 29, 2023

via Email

Dear Tribal Leader:

As the Point of Contact for Tribal Consultation for the U.S. Department of the Treasury 

(Treasury Department), I invite you to a consultation on a Notice of Proposed 

Rulemaking (NPRM or proposed regulations) released today for the Increased Credit or 

Deduction Amounts for Satisfying Certain Prevailing Wage and Registered 

Apprenticeship Requirements under the Inflation Reduction Act of 2022 (IRA).

1 The

proposed regulations cover certain prevailing wage and registered apprenticeship 

(collectively, PWA) requirements under section 45 of the Internal Revenue Code (Code) 

applicable to the renewable electricity production tax credit under section 45 (section 45 

credit), as well as other clean energy tax incentives under the Code as amended or 

added by the IRA. Several of these clean energy tax incentives are increased 5 times if 

PWA requirements are met. This consultation will be held virtually on Monday, 

September 25, 2023, 1pm-4pm EDT.

Background

The IRA amends section 45 to add PWA requirements. If a taxpayer satisfies the PWA 

requirements, the One Megawatt Exception, or the Beginning of Construction (BOC)

Exception, then the credit determined under section 45(a) for electricity produced at a 

qualified facility is multiplied by five. The IRA also enacted new clean energy tax 

incentives and amended existing energy incentives, and these proposed regulations 

would apply to such incentives. Specifically, sections 30C, 45Q, 45U, 45V, 45Y, 45Z, 

48C, 48, 48E, and 179D provide increased credit or deduction amounts to taxpayers

satisfying certain PWA requirements.2 Taxpayers must meet both prevailing wage 

and apprenticeship requirements to satisfy the PWA requirements, with some 

exceptions described in the NPRM.

Section 45(b)(7)(A) provides that a taxpayer satisfies the prevailing wage requirements 

with respect to the construction, alteration, or repair of a facility by ensuring that all 

laborers and mechanics employed by the taxpayer, or any contractor or subcontractor, 

in the construction, alteration, or repair of a facility are paid wages at rates that are not 

less than the prevailing rates determined by the Department of Labor (DOL) in 

accordance with the Davis-Bacon Act.

3 Taxpayers that fail to satisfy the prevailing wage 

requirements with respect to a facility may still receive the increased credit (or 

1 Section 13101(f) of Pub. L. No. 117-169, 136 Stat. 1954, 1962 (August 16, 2022).

2 See the White House Inflation Reduction Act Guidebook for additional details on the bonus credits 

available if PWA requirements are met.

3 40 U.S.C. 3141 et seq.
deduction) amounts if they satisfy the statutory cure provisions by making a correction 

payment and a penalty payment. The proposed regulations provide definitions of 

relevant terms, such as laborer, mechanic, construction, alteration, or repair, employ, 

and locality. The proposed regulations also address prevailing wage rate determinations

as well as the statutory correction and penalty procedures, among other matters.

Section 45(b)(8)(A)(i) provides the apprenticeship requirements that apply with respect 

to the construction of any qualified facility, including the labor hours requirement, the 

ratio requirement, and the participation requirement. Under the labor hours requirement, 

a minimum percentage of the total labor hours of the construction, alteration, or repair 

work (including such work performed by any contractor or subcontractor) has to be 

performed by qualified apprentices. The applicable percentage is: 

(i) in the case of a qualified facility the construction of which begins after December 

31, 2022, and before January 1, 2024, 12.5 percent; and 

(ii) in the case of a qualified facility the construction of which begins after December 

31, 2023, 15 percent.

Taxpayers that fail to satisfy the apprentice requirements with respect to a facility may 

still receive the increased credit (or deduction) amounts if they satisfy the good faith 

effort exception or pay a penalty. The proposed regulations provide further guidance on 

the apprenticeship requirements. The proposed regulations also cover the good faith 

effort exception to the apprenticeship requirements and the penalty procedures, among 

other matters.

On November 30, 2022, the Treasury Department and the IRS published Notice 2022-

61, which provided initial guidance for the PWA requirements. 87 FR 73580, corrected 

in 87 FR 75141 (Dec. 7, 2022). Notice 2022-61 started the 60-day period applicable for 

determining if taxpayers qualify for the increased credit or deduction amounts by 

satisfying the BOC Exception.

To be eligible for the BOC Exception, taxpayers must have begun construction or 

installation of a facility (as defined in Notice 2022-61) before January 29, 2023. Finally, 

Notice 2022-61 provided guidance for determining the beginning of construction under 

sections 30C, 45, 45Q, 45V, 45Y, 48, and 48E, and the beginning of installation under 

section 179D.

With regard to the application of Tribal prevailing wage standards, the NPRM provides 

as follows:

The statutory language of the IRA does not reflect any intent to include 

exceptions from the PWA requirements, other than the One Megawatt 

Exception and the Beginning of Construction Exception. Consequently, 

the Treasury Department and the IRS have not proposed a rule exempting 

Tribal governments from the PWA requirements in section 45.
Consultation Content

Pursuant to Executive Order 13175, President Joseph R. Biden’s Presidential 

Memorandum for Tribal Consultation and Strengthening Nation to Nation Relationships; 

the Presidential Memorandum on Uniform Standards for Tribal Consultation; and 

Treasury’s Action Plan for Tribal Consultation and Collaboration, Treasury is 

commencing Tribal consultation to inform the development of final guidance to 

implement the Increased Credit or Deduction Amounts for Satisfying PWA

Requirements under the IRA.

Specifically, Treasury requests the assistance of Tribal leaders in addressing the 

following topics:

A. To the extent that Indian Tribes request the application of Tribal prevailing wage 

standards rather than Davis-Bacon prevailing wage standards, please explain the 

reason for this request and the challenges, if any, experienced by Indian Tribes 

in complying with Davis-Bacon standards.

i. To your knowledge, do other federal programs that statutorily require 

application of Davis-Bacon prevailing wage standards permit Indian Tribes 

to set their own prevailing wage standards? 

B. Under section 45(b)(8)(B), the labor hours requirement is subject to the 

requirement for apprentice-to-journeyworker ratios of the DOL or the applicable 

State apprenticeship agency (ratio requirement), as well as the requirement to 

employ a certain number of apprentices in relation to journeyworkers 

(participation requirement).

i. Do Indian Tribes presently participate with either the DOL or State 

apprentice programs? 

ii. Do Indian Tribes have their own apprenticeship programs that integrate 

DOL standards? 

iii. Subject to the statutory requirements of section 45, which requires 

compliance with DOL apprenticeship requirements, what questions or 

comments do you have regarding the apprenticeship requirements 

proposed in the NPRM?

C. What other questions or comments, if any, do Indian Tribes have regarding any 

of the other proposed rules in the NPRM?

Register here for the consultation.

We respectfully request that each Tribe register one person to participate in the 

consultation. All others are welcome to register as listen-only participants.

In addition to a Tribal consultation, Treasury is accepting written or electronic comments 

received by October 30, 2023, 11:59 p.m. Alaska Time. Submit written comments at 

tribal.consult@treasury.gov. 

Please note that consultations are off the record and not for press purposes.
We will send out an Agenda and a list of registered speakers before or on September 

22, 2023.

We hope that you will be able to join us for this important discussion and value your 

participation. 

Sincerely,

Chief Lynn Malerba

Treasurer 

Point of Contact for Tribal Consultation 

U.S. Department of the Treasury