On March 22, Sen. Bob Casey, D-Pa., led a group of Democratic senators in a letter to U.S. Department of the Treasury Secretary Janet Yellen, urging Treasury to impose additional burdensome labor mandates and compliance regulations in the agency’s implementation of the Inflation Reduction Act.

The ABC-opposed IRA provides over $270 billion in tax credits for the construction of solar, wind, hydrogen, carbon sequestration, electric vehicle charging stations and other clean energy projects. Unfortunately, these tax credits are conditioned on compliance with restrictive prevailing wage and government-registered apprenticeship program mandates.

On Aug. 29, 2023, Treasury issued a proposed rule and FAQs to provide additional guidance regarding the IRA’s prevailing wage and apprenticeship requirements. On Oct. 30, ABC submitted comments to the IRS and issued a Oct. 31 press release, outlining the cumbersome and unclear nature of the regulations and provisions that inhibit fair and open competition by unfairly favoring unionized contractors. A final rule is expected by the end of 2024, but taxpayers and contractors may rely on the proposed rule for compliance until the final rule is issued.

The senators’ recommendations regarding the regulations would exacerbate these concerns if implemented, with the letter’s suggestions that they would:

• Allow project labor agreements as evidence of compliance with all prevailing wage and GRAP requirements, providing an unfair advantage to unionized contractors competing for IRA projects
• Establish burdensome, new front-end compliance reporting, including weekly certified payrolls, apprentice labor hour reports, labor plans and complaint procedures
• Increase the difficulty for taxpayers to access the Good Faith Effort exception to GRAP requirements by requiring taxpayers to first contact “all registered programs that could be reasonably expected to provide apprentices to the qualified facility”

ABC will continue to advocate for Treasury to instead promote policies that welcome all qualified contractors on clean energy projects. Additional resources and information are available at abc.org/ira.