Notice 2015-13

Bulletin No. 2015–10
March 9, 2015

HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.

INCOME TAX
Rev. Rul. 2015– 4, page 743.
Federal rates; adjusted federal rates; adjusted federal longterm rate and the long-term exempt rate. For purposes of
sections 382, 642, 1274, 1288, and other sections of the
Code, tables set forth the rates for March 2015.

Notice 2015–12, page 700.
Solicits applications for allocations of the remaining available
amount of the volume cap for new clean renewable energy
bonds (“New CREBs”) under §54C(a) of the Internal Revenue
Code, and provides guidance on the application requirements
and forms for requests for New CREBs volume cap allocations,
and the method that the IRS will use to allocate the remaining
volume cap.

Notice 2015–13, page 722.
Notice 2015–13 provides guidance on § 119 of the Tax
Increase Prevention Act of 2014, American Taxpayer Relief Act
of 2012, Pub. L. No. 113–295, enacted December 19, 2014.
The Act amends § 51 of the Internal Revenue Code to extend
the Work Opportunity Tax Credit through Dec. 31, 2014. The
notice also provides employers additional time beyond the
28-day deadline in § 51(d)(13) for submitting Form 8850,
Pre-screening Notice and Certification Request for the Work
Opportunity Credit, to Designated Local Agencies.

Notice 2015–14, page 722.
Round 2 of Section 48A Phase III Program under the Qualifying
Advanced Coal Project Program. This notice updates and amplifies the procedures for the allocation of credits under the
qualifying advanced coal project program of § 48A of the
Internal Revenue Code by announcing the immediate beginning
of the 2015 reallocation round (“Round 2”) of the § 48A Phase
III program.

Finding Lists begin on page ii.

EMPLOYEE PLANS
REG–102648 –15, page 745.
This is a request for public comments with regard to future
guidance required to implement provisions of the Multiemployer Pension Reform Act of 2014, Division O of the Consolidated and Further Continuing Appropriations Act, 2015, Public
Law No. 113–235 (MPRA). MPRA generally permits a sponsor
of a multiemployer defined benefit plan that is in critical and
declining status to suspend certain benefits following the provision of specified notice, consideration of public comments,
approval of an application for suspension, and satisfaction of
other specified conditions (including a participant vote).

EMPLOYMENT TAX
Notice 2015–13, page 722.
Notice 2015–13 provides guidance on § 119 of the Tax
Increase Prevention Act of 2014, American Taxpayer Relief Act
of 2012, Pub. L. No. 113–295, enacted December 19, 2014.
The Act amends § 51 of the Internal Revenue Code to extend
the Work Opportunity Tax Credit through Dec. 31, 2014. The
notice also provides employers additional time beyond the
28-day deadline in § 51(d)(13) for submitting Form 8850,
Pre-screening Notice and Certification Request for the Work
Opportunity Credit, to Designated Local Agencies.

EXCISE TAX
Notice 2015–16, page 732.
This notice provides guidance and requests comments concerning potential approaches to be incorporated into future proposed
regulations regarding the excise tax on high cost employersponsored health coverage under on section 4980I, applicable to
taxable years beginning after December 31, 2017.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.

Introduction
The Internal Revenue Bulletin is the authoritative instrument of
the Commissioner of Internal Revenue for announcing official
rulings and procedures of the Internal Revenue Service and for
publishing Treasury Decisions, Executive Orders, Tax Conventions, legislation, court decisions, and other items of general
interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all
substantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal
management are not published; however, statements of internal practices and procedures that affect the rights and duties
of taxpayers are published.
Revenue rulings represent the conclusions of the Service on
the application of the law to the pivotal facts stated in the
revenue ruling. In those based on positions taken in rulings to
taxpayers or technical advice to Service field offices, identifying details and information of a confidential nature are deleted
to prevent unwarranted invasions of privacy and to comply with
statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions of
the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A, Tax
Conventions and Other Related Items, and Subpart B, Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative Rulings. Bank Secrecy Act Administrative Rulings are issued by
the Department of the Treasury’s Office of the Assistant Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index for
the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

March 9, 2015

Bulletin No. 2015–10

Part I. Rulings and Decisions Under the Internal Revenue Code
of 1986
Section 54A.— Credit to
Holders of Qualified Tax
Credit Bonds
Guidance on the application requirements and
forms for requests for New CREBs volume cap
allocations, and the method that the IRS will use to
allocate the remaining volume cap is set forth. See
Notice 2015–12, page 700.

Section 6431.—Credit for
Qualified Bonds Allowed to
Issuer
Guidance on the application requirements and
forms for requests for New CREBs volume cap
allocations, and the method that the IRS will use to
allocate the remaining volume cap is set forth. See
Notice 2015–12, page 700.

Section 42.—Low-Income
Housing Credit
The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month
of March 2015. See Rev. Rul. 2015– 4, page 743.

Section 280.—Golden
Parachute Payments
Federal short-term, mid-term, and long-term
rates are set forth for the month of March 2015. See
Rev. Rul. 2015– 4, page 743.

Section 382.—Limitation
on Net Operating Loss
Carryforwards and Certain
Built-In Losses Following
Ownership Change
The adjusted applicable federal long-term rate is
set forth for the month of March 2015. See Rev. Rul.
2015– 4, page 743.

Section 412.—Minimum
Funding Standards

Section 807.—Rules for
Certain Reserves

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month
of March 2015. See Rev. Rul. 2015– 4, page 743.

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month
of March 2015. See Rev. Rul. 2015– 4, page 743.

Section 467.—Certain
Payments for the Use of
Property or Services

Section 846.—Discounted
Unpaid Losses Defined

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month
of March 2015. See Rev. Rul. 2015– 4, page 743.

Section 468.—Special
Rules for Mining and Solid
Waste Reclamation and
Closing Costs

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month
of March 2015. See Rev. Rul. 2015– 4, page 743.

Section 1288.—Treatment
of Original Issue Discount
on Tax-Exempt Obligations
The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month
of March 2015. See Rev. Rul. 2015– 4, page 743.

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month
of March 2015. See Rev. Rul. 2015– 4, page 743.

Section 7520.—Valuation
Tables
Section 482.—Allocation of
Income and Deductions
Among Taxpayers
Federal short-term, mid-term, and long-term
rates are set forth for the month of March 2015. See
Rev. Rul. 2015-4, page 743.

Section 483.—Interest on
Certain Deferred Payments

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month
of March 2015. See Rev. Rul. 2015– 4, page 743.

Section 7872.—Treatment
of Loans With BelowMarket Interest Rates
The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month
of March 2015. See Rev. Rul. 2015– 4, page 743.

The adjusted applicable federal short-term, midterm, and long-term rates are set forth for the month
of March 2015. See Rev. Rul. 2015– 4, page 743.

Section 642.—Special
Rules for Credits and
Deductions
Federal short-term, mid-term, and long-term
rates are set forth for the month of March 2015. See
Rev. Rul. 2015– 4, page 743.

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March 9, 2015

Part III. Administrative, Procedural, and Miscellaneous
New Clean Renewable
Energy Bonds
Notice 2015–12
SECTION 1. PURPOSE
This Notice solicits applications for allocations of the remaining available
amount of the national limitation (volume
cap) for new clean renewable energy
bonds (“New CREBs”) under § 54C(a) of
the Internal Revenue Code (“Code”). The
available amounts include forfeited
amounts previously allocated under
Notice 2009 –33, 2009 –1 C.B. 865 (April
27, 2009), and Announcement 2010 –54,
2010 –2 C.B. 386 (September 20, 2010).
This Notice also provides related guidance on the following: (1) application requirements and forms for requests for volume cap allocations; and (2) the method
that the Department of the Treasury and
the Internal Revenue Service (IRS) will
use to allocate the remaining volume cap.
SECTION 2. BACKGROUND
Section 107(a) of the Energy Improvement and Extension Act of 2008, Division
B of Pub. L. No. 110 –343, 122 Stat. 3765
(2008) (“2008 Act”), added § 54C to the
Code to provide for a volume cap of $800
million for New CREBs to finance qualified renewable energy facilities. Section
1111 of Title I of Division B of the American Recovery and Reinvestment Act of
2009, Pub. L. No. 111–5, 123 Stat. 115
(2009) (“2009 Act”), amended § 54C to
increase the volume cap for New CREBs
by $1.6 billion to a total of $2.4 billion.
Section 54C(a) provides that a “new
clean renewable energy bond” or New
CREB means any bond issued as part of
an issue if: (1) 100 percent of the available
project proceeds of such issue are to be
used for capital expenditures incurred by
qualified owners, including governmental
bodies, public power providers, or cooperative electric companies, for one or
more qualified renewable energy facilities; (2) the bond is issued by a qualified
issuer; and (3) the issuer designates such
bond for purposes of § 54C.
Section 54C(c)(2) provides that the
Secretary shall allocate not more than one

March 9, 2015

third of the volume cap to qualified projects to be owned by public power providers, governmental bodies, and cooperative
electric companies, respectively. Section
54C(c)(3)(A) provides that with respect to
public power providers, after the Secretary identifies the qualified projects of
public power providers that are appropriate for receiving an allocation of the New
CREBs volume cap, the Secretary shall, to
the maximum extent practicable, make allocations among such projects in such
manner that the amount allocated to each
such project bears the same ratio to the
cost of such project as the portion of the
New CREBs volume cap that may be allocated to public power providers bears to
the cost of all such projects. Section
54C(c)(3)(B) provides that with respect to
governmental bodies and cooperative
electric companies, the Secretary shall
make allocations of the respective New
CREBs volume cap among qualified projects of governmental bodies and cooperative electric companies in such manner as
the Secretary determines appropriate.
In Notice 2009 –33, the Treasury Department and the IRS solicited applications for allocations of New CREBs volume cap and set forth administrative
procedures for the initial allocations of the
$2.4 billion volume cap. In October 2009
and January 2010, the IRS allocated the
entire volume cap designated for projects
to be owned by governmental bodies and
public power providers. At that time,
$609,204,555 of the available $800 million in volume cap designated for projects
to be owned by cooperative electric companies was allocated. In Announcement
2010 –54, the IRS solicited applications
for the remaining $190,795,445 in volume
cap available for allocation to qualified
projects to be owned by cooperative electric companies, referring to the application
and allocation process and the guidance in
Notice 2009 –33. In March 2011, the IRS
awarded the remaining volume cap under
that Announcement.
Section 9(j) of Notice 2009 –33 provides that allocations under that Notice
must be used or relinquished no later than
three years after the date of the letter issuing the allocation. Similarly, unused allocations made under Announcement

700

2010 –54 revert back to the IRS no later
than three years after the date of the letter
issuing the allocation. Thus, any unused
allocations under Notice 2009 –33 and
Announcement 2010 –54 expired and reverted back to the IRS by no later than
March 4, 2014.
Section 9(j) of Notice 2009 –33 provides that the IRS plans to announce a
process to reallocate any unallocated volume cap and any allocated volume cap
that has been relinquished and has reverted to the IRS. Additionally, the Notice
provides that, consistent with allocation
requirements under § 54C(c)(2), any relinquished or reverted volume cap will be
reallocated only for a qualified project
owned or to be owned by the same category of qualified owner as the owner that
originally received the relinquished or reverted allocation.
Public power providers have reported
to the IRS the issuance of New CREBs in
the amount of $283,434,308.65; governmental bodies have reported to the IRS the
issuance of New CREBs in the amount of
$202,865,036.40; and cooperative electric
companies have reported to the IRS the
issuance of New CREBs in the amount of
$519,221,531. Based on these reports, the
passage of the deadlines described above
for issuing New CREBs, and other information provided to the IRS, the IRS has
identified $516,565,691.35 of volume
cap available for reallocation for projects to be owned by public power providers, $597,134,963.60 of volume cap available for reallocation for projects to be
owned by governmental bodies, and
$280,778,469 of volume cap available for
reallocation for projects to be owned by
cooperative electric companies.
SECTION 3. SCOPE AND
GENERAL APPLICATION
REQUIREMENTS
.01 Scope. This Notice solicits applications for volume cap allocations for projects to be owned by governmental bodies,
cooperative electric companies, and public power providers. Allocations that the
IRS makes under this Notice for projects
to be owned by governmental bodies and
cooperative electric companies and that
the issuer forfeits or that otherwise revert

Bulletin No. 2015–10

to the IRS will be available for reallocation under this Notice. Allocations under
this Notice for projects to be owned by
public power providers and that the issuer
forfeits or that otherwise revert to the IRS
are expected to be reallocated as part of an
allocation process to be announced by the
IRS in future administrative guidance that
generally follows the process set forth in
this Notice, subject to such changes or
modifications that are announced by the
IRS in such future administrative guidance. For a similar supplemental announcement regarding reallocations of
volume cap, see Announcement 2010 –54,
2010 –2 C.B. 386 (September 20, 2010).
.02 Application Requirements. Each
application for an allocation of the New
CREBs volume cap under § 54C submitted pursuant to this Notice (Application)
must be prepared and submitted in accordance with this section 3.02. By submitting an Application, the applicant agrees
to comply with the requirements of this
Notice. For an Application to comply with
this Notice, among other things, the Application must be prepared in substantially
the same format as the form (including
exhibits thereto) attached to this Notice as
Appendix A. This Notice, including Appendix A, may be found electronically
under the link “TEB Published Guidance”
on the IRS web site at http://www.irs.gov/
Tax-Exempt-Bonds.
a. Qualified issuer. The Application
must be submitted by a qualified issuer
(Applicant) within the meaning of
§ 54C(d)(6). For this purpose, a “qualified
issuer” includes a “public power provider,” a “cooperative electric company,”
a “governmental body,” a “clean renewable energy bond lender,” and a “not-forprofit electric utility which has received a
loan or loan guarantee under the Rural
Electrification Act.” For further information on these definitions, see Section 2 of
the Application included in Appendix A
to this Notice. The Application must identify the Applicant, including the Applicant’s Federal tax identification number,
and include a certification that the Applicant is a qualified issuer within the meaning of § 54C(d)(6).
b. Signatures. The Application must be
signed and dated by an authorized official
of the Applicant. For purposes of the Application, the term “authorized official of

Bulletin No. 2015–10

the Applicant” means an officer, board
member, employee, or other official of the
Applicant who is duly authorized to execute legal documents on behalf of the Applicant in connection with incurring debt
of the Applicant (for example, a mayor,
chairperson of a city council, chairperson
of a board of directors, county or city
administrator or manager, chief executive
officer, or chief financial officer) similar
to the kind of duly authorized official who
would be authorized to execute documents in connection with an issuer’s declaration of official intent to reimburse expenditures from the proceeds of a
borrowing under § 1.150 –2(e) of the Income Tax Regulations.
c. Contact person. The Application
must designate one or more persons with
knowledge of the project that the Applicant duly authorizes to discuss with the
IRS any information relating to the Application. The designation must include the
designee’s name, title, telephone number,
fax number, and mailing address. If a designee is not an official or officer of the
Applicant, the Application must include
an executed Form 8821 (Taxpayer Information Authorization) or Form 2848
(Power of Attorney and Declaration of
Representative) authorizing the disclosure
of taxpayer information specifically relating to the Application to the designee.
d. Address for submissions. The Application must be submitted by hard copy
accompanied by a copy of the Application
in PDF format on a CD and sent (by U.S.
Postal Service or designated private delivery services) to the Internal Revenue Service (IRS), SE:T:GE:TEB:CPM, Attention:
Kenneth Stengel, 1122 Town & Country
Commons, Chesterfield, MO 63017.
e. Project description. The Application
must contain the information required by
this section 3.02.e. Applicants receiving
an allocation of volume cap may use proceeds of the New CREBS (proposed
bonds) only to finance the costs of the
project (as defined in section 3.02.e.(i) of
this Notice) described in the Application
and related eligible expenditures (as permitted under §§ 54A and 54C)) with certain permitted deviations (as provided in
section 7 of this Notice).
(i) Qualified project. The Application
must describe in reasonable detail the
qualified renewable energy facility or fa-

701

cilities constituting the project to be financed with the proceeds of the New
CREBs. The Application must include a
certification that each facility in the project will constitute a “qualified renewable
energy facility” under § 54C(d)(1). The
Application must indicate the expected
date that the acquisition or construction of
each facility in the project will commence
and the expected date that each facility in
the project will be placed in service. Property owned by a qualified owner that is
functionally related and subordinate (as
determined under § 1.103– 8(a)(3)) to any
qualified renewable energy facility described in § 54C(d)(1) may be financed as
part of the facility.
(ii) Certification of engineer. The Application must contain a certification by an
independent, licensed engineer that each
facility in the project will meet the requirements for a “qualified facility” under
the applicable provisions of § 45(d) (but
without regard to § 45(d)(8) and (10) and
without regard to any placed in service
date or associated construction commencement date), and that each facility,
upon being placed in service, is reasonably expected to produce electricity.
(iii) Qualified owner—(A) In general.
Each Application must identify the expected owner of the project and include a
certification with respect to the project
stating whether the entity that will own
the project is a public power provider,
governmental body, or cooperative electric company. For purposes of this Notice,
the term “qualified owner” means a public
power provider, a governmental body, or
a cooperative electric company within the
meaning of § 54C(d)(2), (3), and (4), respectively. For purposes of this Notice, a
“qualified owner” includes any entities
that are members of the same controlled
group (within the meaning of § 1.150 –
1(e)) as the qualified owner. Joint ownership of qualified renewable energy facilities financed with New CREBs will be
recognized in a manner similar to the recognition of joint ownership of output projects under the private activity bond restrictions on tax-exempt bonds under
§ 141. Applications for volume cap for
projects to be owned by governmental
bodies or cooperative electric companies
must include a certification that the expected qualified owner of the project is

March 9, 2015

not a public power provider under
§ 54C(d)(2).
(B) Entities eligible under multiple
owner categories. Except as otherwise
provided in section 3.02.e.(iii)(C) of this
Notice, if the expected qualified owner
of the project is described in more than
one category of qualified owners under
§ 54C(d)(2), (3) or (4), the Application
must identify only one such category for
which it is seeking volume cap for the
project.
(C) Public power providers ineligible
for volume cap designated for governmental bodies or cooperative electric companies. An entity that is a “public power
provider” under § 54C(d)(2) is ineligible
to receive volume cap designated for projects to be owned by governmental bodies
or cooperative electric companies.
(iv) Project cost. The Application must
describe the reasonably expected costs of
the project. The Applicant must certify
that none of the reasonably expected costs
of the project to be financed with New
CREBs issued pursuant to the allocation
were included in a previous application or,
if the costs were included in a previous
application, that (1) the IRS has been notified that such application has been withdrawn, or (2) that any previous allocation
for those costs reverted to the IRS.
(v) Location of project. The Application must identify the location of the
project.
(vi) Approvals. The Application must
state that all required Federal, State, and
local approvals (regulatory and otherwise)
for the project, the proposed bonds, and
any other required financing for the project have been obtained or, if any approvals have not yet been obtained, the Application must include a certification that the
Applicant reasonably expects to receive
all required approvals in time to permit
issuance of the proposed bonds before the
expiration of the volume cap allocation set
forth in section 5.e. of this Notice. The
Application must identify any required
approvals that have not been obtained and
must describe the Applicant’s plan and
expected time frame for obtaining such
approvals.
f. Plan of financing. The Application
must contain a reasonably detailed description of the plan of financing for the
project, including (1) the amount of New

March 9, 2015

CREBs expected to be issued together
with a description of how proceeds of
such bonds will be allocated to the project,
(2) any other reasonably expected sources
of financing for the project together with a
description of how such financing will be
allocated to the project, and (3) documentation from an independent third party
who is knowledgeable about the marketability of municipal bonds evidencing that
the proposed bonds are reasonably expected to be marketed prior to the expiration of the volume cap allocation set forth
in section 5.e. of this Notice. Documentation that may be used to meet requirement
(3) under this section 3.02.f. includes the
following: a bond purchase commitment
letter from an investor; a credit enhancement commitment letter from a financial
institution; a letter from an underwriter or
financial advisor to the effect that the sale
of the proposed bonds is likely to be completed in time to permit issuance of the
proposed bonds before the expiration of
the volume cap allocation for the proposed bonds; documentation similar to the
foregoing documentation; or a combination of the foregoing documentation. If the
owner expects to use the proceeds of New
CREBs to reimburse amounts that the
owner paid with respect to a qualified
project, the Application must include a
certification that the requirements under
§ 54A(d)(2)(D) will be met before any
such reimbursement is made.
g. Compliance with Federal tax laws.
The Application must include a certification that the Applicant reasonably expects
that the proposed bonds will meet the applicable requirements of §§ 54A and 54C
and that the Applicant has engaged bond
counsel to render an opinion to the effect
that the proposed bonds will meet those
requirements.
h. Dollar amount of allocation requested. The Application must specify the
dollar amount of the volume cap requested, not to exceed the amount of the
proposed bonds.
i. Demonstration of readiness to issue.
The Application must include a certification that the Applicant reasonably expects
to issue the proposed bonds prior to the
expiration of the volume cap allocation
described in section 5.e. of this Notice.
j. Certain forfeitures of volume cap.
The IRS may take into account whether

702

volume cap previously allocated to the
Applicant under this Notice was forfeited
or expired. The Application must include
either (1) a certification that no previous
forfeitures or expirations of volume cap
occurred with respect to volume cap allocated under this Notice or (2) identify any
allocation of volume cap previously received by the Applicant under this Notice
and, if such allocation, or any part thereof,
was forfeited or expired, provide an explanation of the reasons for such forfeiture
or expiration.
k. Required declaration in application.
The Application and all subsequent submissions made in connection with the Application must include the following declaration signed and dated by an authorized
official of the Applicant (described in section 3.02.b. of this Notice):
I hereby certify that I am an authorized officer or official of the Applicant, that I am duly authorized to
execute legal documents on behalf
of the Applicant in connection with
incurring debt, and that I am duly
authorized to execute legal documents on behalf of the Applicant in
making this Application. Under
penalties of perjury, I declare that
(i) I have knowledge of the relevant
facts and circumstances relating to
this Application and the project(s)
described herein, and (ii) I have examined this Application and the
supporting documents, including
any supplemental submission, and
to the best of my knowledge and
belief, all of the facts contained in
this Application, any supplemental
submission, and the supporting
documents are true, correct, and
complete.
SECTION 4. SUBMISSION DATES
AND DUE DATES; INCOMPLETE
APPLICATIONS
a. Submission date and incomplete
Applications. Each Application will be
treated as submitted on the later of the day
the IRS receives the Application, or if the
IRS requests any additional information
or supporting documents, the day the additional information and supporting documents are received by the IRS (submission date). To be treated as submitted, the
Application, additional information, and
supporting documents must satisfy all of

Bulletin No. 2015–10

the applicable requirements of this Notice,
including without limitation, those described in section 3 of this Notice. The
IRS may request additional information to
support any of the requirements of this
Notice, including additional information
and certifications to demonstrate that the
proposed project will qualify for New
CREBs financing under § 54C and to
demonstrate the Applicant’s readiness to
issue the proposed bonds. Except as otherwise stated in this Notice, an Application will not satisfy the requirements of
this Notice until the IRS receives information satisfying all of the applicable requirements of this Notice, including any
requested additional information.
b. Due date for Applications for volume cap designated for public power providers. Applicants for projects to be
owned by public power providers must
submit complete Applications for an allocation of volume cap under this Notice on
or before June 3, 2015. Applications with
a submission date after this due date will
not be processed.
c. Timing for Applications for volume
cap designated for governmental bodies
and cooperative electric companies. Applicants for projects to be owned by governmental bodies and cooperative electric
companies may submit Applications for
an allocation of volume cap under this
Notice beginning March 5, 2015. Applications submitted before that date will be
treated as being submitted on that date.
SECTION 5. GENERAL
ALLOCATION PROCESS AND
METHODOLOGY
a. Allocation methods. New CREBs
volume cap under § 54C will be allocated
in accordance with this section 5.
(i) Allocation methodology for public
power providers. Up to one-third of the
total volume cap will be allocated to
qualified projects owned by public
power providers using the pro-rata allocation method. Except as otherwise provided in this section 5, the IRS will allocate an amount of New CREBs volume
cap for projects to be owned by public
power providers in an amount equal to the
amount requested in the Application. If
the aggregate amount of volume cap requested for all qualified projects to be
owned by public power providers exceeds

Bulletin No. 2015–10

the actual amount of volume cap available
for allocation to such projects, the amount
of volume cap allocated to a project for a
public power provider will bear the same
proportion to the available volume cap
allocated to public power providers as the
amount of volume cap requested for that
project bears to the total amount of volume cap requested for all projects to be
owned by public power providers.
(ii) Allocation methodology for governmental bodies and cooperative electric
companies. Up to one-third of the total
volume cap will be allocated to qualified
projects owned by governmental bodies
and up to an additional one-third of the
total volume cap will be allocated to qualified projects owned by cooperative electric companies. Except as otherwise provided in this section 5, the IRS will
allocate an amount of New CREBs volume cap for projects to be owned by governmental bodies and cooperative electric
companies in an amount equal to the
amount requested in the Application on a
first-come, first-served basis by order of
submission date (as defined in section 4.a.
of this Notice).
b. Limit on allocation to any one Applicant for projects to be owned by governmental bodies or cooperative electric
companies. No qualified owner (including
any entities that are members of the same
controlled group within the meaning of
§ 1.150 –1(e)) that is a governmental body
or cooperative electric company will receive an aggregate allocation of volume
cap under this Notice to exceed the published Volume Cap Limit (taking into account all allocations under this Notice that
have not reverted to the IRS) in effect for
the period that includes the submission
date. The published Volume Cap Limit for
any period is the greater of: (1) 20 percent
of the amount of available volume cap for
projects to be owned by governmental
bodies or cooperative electric companies,
as applicable, as of the first day of such
period (determined based on information
available to the IRS, including allocation
data and reports of bonds issued); or (2)
$40 million. The IRS will update the Volume Cap Limit and the available amounts
approximately every sixty days until the
applicable volume cap is fully allocated.
The IRS plans to publish these updates on
the IRS website at http://www.irs.gov/

703

Tax-Exempt-Bonds or at such other location as the IRS may provide in future
administrative guidance. An Application
will be treated as complete only if the
amount of volume cap requested is within
the applicable Volume Cap Limit and the
Application otherwise meets the requirements of this Notice.
c. Insufficient available volume cap.
The rules set forth in this section 5.c.
apply if an Applicant requests volume cap
in an amount that is within the published
Volume Cap Limit under section 5.b.
above but that exceeds the amount of volume cap that is then available for allocation on the submission date (based on
application activity since the most recent
publication of the Volume Cap Limit and
information then available to the IRS).
(i) Governmental bodies and cooperative electric companies. If an Application
for volume cap for a project to be owned
by a governmental body or cooperative
electric company requests more volume
cap than is available on the Application
submission date for such category of qualified owner, then the Applicant will have
the opportunity to receive an allocation of
volume cap up to the available volume
cap. Further, if two or more Applications
for the same category of qualified owner
have the same submission date and allocation of the requested amounts would
cause the available volume cap to be exceeded, then each such Applicant will
have the opportunity to receive a portion
of the available volume cap in the proportion that each amount requested has to the
sum of the amounts requested. In any circumstance in which available volume cap
is in an amount less than the amount requested, the IRS will notify the Applicant
and the Applicant will have 30 days from
the date the IRS contacts the Applicant to
notify the IRS (at the address specified in
section 3.02.d. of this Notice) of its decision to either (1) immediately accept the
allocation in the lesser amount, or (2) delay the allocation for up to 90 days from
the submission date to determine if additional volume cap might become available. If the Applicant decides to accept an
allocation in a lesser amount, the Applicant will notify the IRS by submitting a
notice to the IRS in substantially the same
form as attached to this Notice as Appendix C. If the Applicant decides to delay

March 9, 2015

receiving its allocation, the Applicant will
notify the IRS by submitting notice in
substantially the same form as attached to
this Notice as Appendix D. If the Applicant decides to delay receiving its allocation and the full amount requested does
not become available before the end of the
period designated by the Applicant, after
such period the IRS will notify the Applicant of the amount it can allocate to the
Applicant. The Applicant will have 30
days from the date the IRS notifies the
Applicant of such available amount to accept the lesser amount by submitting a
notice to the IRS in substantially the same
form as attached to this Notice as Appendix C. If the Applicant decides not to
accept the lesser amount, the Application
will be treated as withdrawn.
(ii) Public power providers. If the aggregate amount of volume cap requested
for all qualified projects to be owned by
public power providers exceeds the actual
amount of volume cap available for allocation to such projects, each Applicant
will be notified by the IRS of the amount
of the pro-rata allocation it would receive
pursuant to section 5.a. of this Notice and
given 30 days to notify the IRS (at the
address specified in section 3.02.d. of this
Notice) whether it will accept or decline
the reduced amount. If the Applicant decides not to accept the lesser amount, the
Application will be treated as withdrawn.
See section 5.f. of this Notice for information on effect of withdrawals.
(iii) Supplemental certifications and information for partial allocations. If the
Applicant accepts an amount that is less
than the amount requested in the Application, the Applicant must provide along
with its decision (1) a certification in substantially the same format as the form attached to this Notice as Appendix C (A)
confirming its decision to accept the allocation in the lesser amount, and (B) either (I)
certifying, based on the lesser amount accepted, that the information included in the
Application pursuant to section 3.02.e. of
this Notice is accurate (subject to provisions
of section 7.a. of this Notice relating to
insubstantial deviations), or (II) submitting
revised information required under section
3.02.e. of this Notice based on the lesser
amount accepted and certifying that such
revised information meets the requirements
of this Notice, and (2) a revised plan of

March 9, 2015

financing as described in section 3.02.f. of
this Notice based on the lesser amount. The
IRS may require the Applicant to supplement the Application to demonstrate that the
requirements of this Notice are met based
on the reduced allocation.
(iv) Effect of supplemental certifications on submission date. For purposes of
section 4 of this Notice, the submission date
for an Application for which insufficient
volume cap exists will not change if the
Applicant submits within 30 days of the
notification from the IRS any supplemental
information required under this section 5.c.
(v) Failure to notify IRS of decision. If
the Applicant does not notify the IRS of
its decision within the applicable time
frames specified in sections 5.c.(i) and (ii)
of this Notice, the Application will be
treated as withdrawn.
d. Confirmation of allocation. The IRS
will send Applicants letters confirming allocations of volume cap (allocation letter).
An allocation of New CREB volume cap
by the IRS under this Notice is not a
determination that any bonds issued pursuant to the allocation are new clean renewable energy bonds under § 54C. The
Service may upon examination determine
that the applicable requirements of the
Code, including §§ 54A, 54C, or 6431,
and any applicable administrative or regulatory guidance, such as this Notice, are
not met with respect to any bond issued
pursuant to the volume cap allocation.
e. Expiration of allocation. Applicants
have 180 days from the date of the allocation letter to issue the proposed bonds.
Allocations with respect to any portion of
the proposed bonds not issued during that
time will be treated as forfeited and revert
to the IRS and will be available for reallocation. The IRS does not expect to grant
extensions to this expiration date.
f. Effect of forfeitures and withdrawals.
A governmental body or a cooperative
electric company that has withdrawn or is
deemed to have withdrawn its Application, or that received an allocation that
expired or was forfeited, may file a new
Application for volume cap that meets all
the requirements of this Notice, including
the information described in section
3.02.j. of this Notice, and that Application
will be subject to the submission provisions of section 4 and the applicable limits
set forth in section 5 of this Notice in

704

effect on the submission date of the new
Application. A public power provider that
has withdrawn or is deemed to have withdrawn its Application, or that received an
allocation that expired or was forfeited,
may not reapply for an allocation pursuant
to this Notice. See section 3.01 of this
Notice for information on reallocations.
g. Notice of voluntary forfeiture. If an
Applicant determines that it does not intend
to use any part of its allocation of volume
cap (including in circumstances in which the
Applicant determines to finance the project
with financing other than the proposed
bonds), it must notify the IRS in writing at
the address set forth in section 3.02.d. of this
Notice of its intention to forfeit such part of
the allocation and, when the IRS receives
this notice from the Applicant, the IRS will
treat that allocated amount as forfeited and
reverting to the IRS. The forfeited amount
will be available for reallocation.
SECTION 6. CONSENT TO
DISCLOSURE OF ALLOCATION
To provide the public with information
on how the volume cap has been allocated
and to facilitate oversight of the New
CREBs program, the IRS intends to publish on the IRS web site at http://
www.irs.gov/Tax-Exempt-Bonds certain
data regarding the results of the allocation
process. The data will be most useful to the
public if it identifies the specific allocations
awarded. Pursuant to § 6103, consent is
required for the IRS to disclose identifying
information with respect to Applicants
awarded an allocation. Therefore, the IRS
seeks the Applicants’ consent for the IRS to
disclose the name of the issuer, the name of
the qualified renewable energy facility
owner (if other than the issuer), the type and
location of the facility that is the subject of
the Application, and the amount of volume
cap allocation awarded to that Applicant. To
provide valid consent, the consent must be
in the form set forth in Appendix B. This
consent to disclosure of an Applicant’s information is optional; an Applicant is not
required to sign the consent to receive an
allocation. The IRS will not publish identifying information on Applications that are
not awarded an allocation of volume cap or
pending Applications, but may publish the
aggregate amount of allocation requests.

Bulletin No. 2015–10

SECTION 7. DEVIATIONS FROM
INFORMATION IN APPLICATION
a. Insubstantial deviations—(i) In general. An allocation of volume cap is valid
for § 54C if the proposed bonds are issued
and the proceeds of such bonds are allocated to expenditures in a manner that
does not substantially deviate from the
information submitted in the Application.
For this purpose, whether a deviation from
the information submitted in the Application constitutes an insubstantial deviation
is determined based on all the facts and
circumstances using criteria similar to
those used under § 5f.103–2(f)(2) of the
regulations, as amended, regarding insubstantial deviations in the information required for public approval of tax-exempt
private activity bonds under § 147(f) of
the Code. IRS approval is not required for
insubstantial deviations, and the IRS will
not provide advice or rule on whether a
deviation is insubstantial.
(ii) Notice of insubstantial deviation—
(1) Deviations before the submission of
Notice of Issuance. If the insubstantial
deviation occurs before the Applicant submits the Notice of Issuance described in
section 8.b. of this Notice, the Notice of
Issuance must include a description of the
insubstantial deviation.
(2) Deviations after the submission of
the Notice of Issuance. If the insubstantial
deviation occurs after the Applicant submits
the Notice of Issuance required under section 8.b. of this Notice, the Applicant must
submit a supplement to the Notice of Issuance that describes the insubstantial deviation. The supplement should contain a copy
of the Notice of Issuance as well as the
details of the deviation and should be sent to
the same address as the Notice of Issuance.
b. Substantial deviations—(i) Substantial deviations before issuance. Other than
as provided in section 7.b.(ii) below, an allocation of volume cap under an Application is invalid for purposes of § 54C if there
is a change relating to the issuance of the
proposed bonds or the allocation of the proceeds of such bonds to expenditures that
substantially deviates from the information
submitted in the Application. In the event of
such a change prior to the issuance of its
proposed bonds, the Applicant may notify
the IRS that it does not intend to use the
original allocation of bond volume cap and

Bulletin No. 2015–10

may submit a new Application under this Notice or future administrative guidance, as applicable, reflecting the modified information.
(ii) Certain post-issuance deviations. A
substantial deviation that occurs after the
proposed bonds are issued and prior to the
allocation of proceeds of such bonds to
expenditures under the general rule set
forth in § 1.148 – 6(d)(1)(iii) will not invalidate the allocation of volume cap under the Application if, and only if, the
substantial deviation does not change the
category of qualified owner for the project
and the Applicant submits a supplement to
the Notice of Issuance (as defined in section
8.b. of this Notice) to the IRS. The supplement must (1) include a statement demonstrating that the Applicant, at the time of the
issuance of the bonds, reasonably expected
that the issuance of the proposed bonds and
the allocation of the proceeds of such bonds
to expenditures would not substantially deviate from the information provided in the
Application; (2) describe in detail the substantial deviation and the surrounding circumstances by reference to the information
submitted in the Application and the actual
information subsequent to the bond issuance; and (3) include a certification that the
Applicant has received an opinion from
bond counsel to the effect that the change
will not cause the bonds to fail to meet the
requirements of §§ 54A and 54C (including
any applicable regulatory and administrative
guidance published under those Code sections). The Applicant must send this supplement to the address set forth in section 8.b.
of this Notice within 90 days of the date that
the Applicant reasonably expected that there
would be a deviation and the supplement
must be accompanied by a declaration, subject to the penalty of perjury, in substantially
the same form as the declaration under section 3.02.k. of this Notice.
SECTION 8. INFORMATION
REPORTING
a. Information reporting. Section
54A(d)(3) requires issuers of New CREBs
to submit information reporting returns to
the IRS similar to those required to be
submitted under § 149(e) for tax-exempt
State or local governmental bonds. These
information reporting returns are required to
be submitted at the same time and in the
same manner as those under § 149(e) on
forms prescribed by the IRS. Subject to up-

705

dated IRS information reporting forms or
procedures, an issuer of New CREBs should
file Form 8038 –TC. For this Notice, the
term “issue” has the meaning used for taxexempt bond purposes in § 1.150 –1(c).
b. Notice of issuance. Not later than 15
days after the proposed bonds are issued,
the Applicant shall send to the IRS a notice of issuance (Notice of Issuance) for
the bonds, which shall include the following
information: (1) the Applicant’s name and
taxpayer identification number; (2) the issue
price of the bonds issued; (3) the issue date
of the bonds; and (4) a description of the
project financed with the bonds. If the IRS
has not received a Notice of Issuance within
15 days of the scheduled expiration of an
allocation, the IRS may request that the Applicant submit the Notice of Issuance or
confirm that the allocation was forfeited. If
the Applicant fails to submit the Notice of
Issuance within 15 days of this request or
fails to confirm that the allocation was forfeited, the IRS, in its discretion, may treat
the allocation as forfeited and as having
reverted back to the IRS and available for
reallocation. The Notice of Issuance or written confirmation that the allocation was forfeited should be sent to: Internal Revenue
Service, SE:T:GE:TEB:CPM, Attention:
Kenneth Stengel, 1122 Town & Country
Commons, Chesterfield, MO 63017. See
section 7.b. of this Notice for requirements
when there are substantial deviations.
SECTION 9. RELIANCE ON
NOTICE AND INTERIM
GUIDANCE
Taxpayers may rely on the interim
guidance provided in this Notice, Notice
2009 –33, and Notice 2010 –35, 2010 –19
I.R.B. 660 (May 10, 2010), and, to the
extent not inconsistent with §§ 54A and
54C, taxpayers may also rely on Notice
2006 –7, 2006 –1 C.B. 559 (March 6,
2006), and Notice 2007–26, 2007–14
I.R.B. 870 (April 2, 2007).
SECTION 10. EFFECT ON OTHER
DOCUMENTS
To the extent not amended by the 2008
Act and the 2009 Act, references to § 54 of
the Code in Notice 2006 –7 and Notice
2007–26 apply as if the references were to
corresponding provisions of §§ 54A and
54C.

March 9, 2015

For the application requirements for
Tribal Economic Development Bonds, see
Notice 2012– 48, 2012–31 I.R.B. 102 (July
30, 2012). Differences in the application
requirements between this Notice and Notice 2012– 48 are generally based upon the
differences between the Tribal Economic
Development Bond and the New Clean Renewable Energy Bond programs.
SECTION 11. EFFECTIVE DATE
This Notice is effective as of February
3, 2015.
SECTION 12. PAPERWORK
REDUCTION ACT
The collections of information contained in this Notice have been reviewed
and approved by the Office of Management and Budget in accordance with the
paperwork Reduction Act (44 U.S.C.
3507) under control number 1545–2160.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays
a valid OMB control number.
The collections of information in this
Notice are in sections 3, 5, 6, 7, and 8.b. of

this Notice. This information is required to
implement and administer the New Clean
Renewable Energy Bond (New CREBs)
program under § 54C of the Code. Information collected under sections 3, 5, 7, and 8.b.
of this Notice will be used by the IRS to
determine (1) an Applicant’s eligibility to
receive an allocation of volume cap for New
CREBs and (2) the amount of available volume cap that may be allocated to each Applicant. Information collected under section
6 of this Notice will be used by the IRS to
provide the public with information on how
the volume cap has been allocated and to
facilitate oversight of the New CREBs program. The collections of information are
voluntary under section 6 of this Notice and
required to obtain a benefit under sections 3,
5, 7, and 8.b. The likely respondents are
state or local governments, certain public
electric utilities, and certain mutual or cooperative electric companies.
The estimated total annual reporting
and/or recordkeeping burden is 900 hours.
The estimated burden per collection
per respondent/recordkeeper varies from
0.5 hours to 4 hours, depending on the
type of collection and individual circumstances, with an estimated average of 2.25

hours. The estimated number of respondents and/or recordkeepers is 400.
The estimated annual frequency of responses (used for reporting requirements
only) is 100.
Books or records relating to a collection
of information must be retained as long as
their contents may become material in the
administration of any internal revenue law.
Generally, tax returns and tax return information are confidential, as required by section 6103.
SECTION 13. DRAFTING
INFORMATION
The principal authors of this Notice are
Debbie Cho of the IRS Office of Tax
Exempt Bonds and Zoran Stojanovic of
the Office of Associate Chief Counsel (Financial Institutions and Products). For further information regarding this Notice
contact Ms. Cho at 714-347-9431(not a
toll-free call) or Mr. Stojanovic at 202317-4564 (not a toll-free call). For further
information about submitted Applications, contact Kenneth Stengel at (636)
255-1286 (not a toll-free number).

APPENDIX A
APPLICATION FOR ALLOCATION OF
NEW CLEAN RENEWABLE ENERGY BOND VOLUME CAP
Internal Revenue Service
SE:T:GE:TEB:CPM
Attention: Kenneth Stengel
1122 Town & Country Commons
Chesterfield, MO 63017
Dear Sir or Madam:
The following constitutes the application (Application) of (Name) (Applicant) for allocation of new clean renewable energy bond (New
CREB) volume cap under § 54C(a) of the Internal Revenue Code (Code) (unless otherwise noted, section references herein are to the Code)
to finance the project described below. (If a single Application is used to request New CREB volume cap for more than one qualified
renewable energy facility, then all of the required information in the Application must be provided separately for each facility.)
1. Applicant/issuer.
Name

_________________________________________________________

Street Address

_________________________________________________________

City

_________________________ State ___________________ Zip ________________

Telephone Number

_____________________

Fax Number

_____________________

Taxpayer Identification Number

_____________________

March 9, 2015

706

Bulletin No. 2015–10

2. Status of issuer. (Select as appropriate)
The Applicant/Issuer is a “qualified issuer” under § 54C(d)(6) because it is —
(i) a “clean renewable energy bond lender” that is a cooperative owned by, or has outstanding loans to, 100 or more
cooperative electrical companies and was in existence on February 1, 2002, or is an affiliate that is owned by such a lender,
as demonstrated by the attached documents included as Exhibit C.
(ii) a “cooperative electric company” that is a mutual or cooperative electric company described in § 501(c)(12) or
§ 1381(a)(2)(C), as demonstrated by the attached documents included as Exhibit C, including a copy of the determination
letter previously obtained from the IRS, if any (or other relevant documents).
(iii) a “governmental body” that is a State, a possession of the United States, the District of Columbia, an Indian tribal government,
or any political subdivision of the foregoing, as demonstrated by the attached documents included as Exhibit C. (Supporting
documents are not required to be attached for governmental bodies that are general purpose governmental entities with substantial
taxing, eminent domain, and police powers such as a county, city, municipality, township, or borough.)
(iv) a “public power provider” that is a State utility with a service obligation, as such terms are defined in § 217 of the Federal
Power Act (as in effect on October 3, 2008), as demonstrated by the attached documents included as Exhibit C.
(v) a “not-for-profit electric utility which has received a loan or loan guarantee under the Rural Electrification Act,” as demonstrated
by the attached documents included as Exhibit C. For this purpose, supporting documents should include copies of the articles
of incorporation and bylaws of the not-for-profit electric utility, and of the loan or loan guarantee documents.
3. Name of Qualified Renewable Energy Facility.
_______________________________________________________________________________________________________
4. Detailed Description of the Qualified Renewable Energy Facility. A reasonably detailed description of the qualified
renewable energy facility or facilities (the “Project”) is set forth below or in attached Exhibit A, including reasonably expected costs
of components, such as land, site preparation, equipment, installation, other dedicated facilities such as transmission, facility
capacity, and projected or expected use of the power produced at the facility.
5. Project Cost. Include in the attached Exhibit B a description of the reasonably expected costs of the Project and a certification
that none of the reasonably expected costs of the Project to be financed with New CREBs pursuant to the allocation were included
in a previous application unless the IRS has been notified that such application has been withdrawn or that any previous allocation
for those costs reverted to the IRS.
6. Qualified Renewable Energy Facility Owner
Name

________________________________________________________

Street Address

_______________________________________________________

City _________________________ State ___________________ Zip __________________________
Telephone Number

_____________________

Fax Number

_____________________

Taxpayer Identification Number ________________________________________________________
7. Status of Owner – (Select as appropriate the category with respect to which the allocation is requested)
The project is owned by a qualified entity under § 54C(d)(1) because the owner is —
(i) a qualified owner under § 54C(d)(4) that is a mutual or cooperative electric company under § 501(c)(12) or § 1381(a)(2)(C),
as demonstrated by the attached documents included as Exhibit C, including a copy of the determination letter previously
obtained from the IRS, if any (or other relevant documents). Also, the project owner is not a public power provider under
§ 54C(d)(2).
(ii) a qualified owner under § 54C(d)(3) that is a “governmental body” and is a State, a possession of the United States, the
District of Columbia, an Indian tribal government, or any political subdivision of the foregoing, as demonstrated by the
attached documents included as Exhibit C, and not a public power provider under § 54C(d)(2). (Supporting documents are
not required to be attached for governmental bodies that are general purpose governmental entities with substantial taxing,
eminent domain, and police powers such as generally a county, city, municipality, township, or borough.)
(iii) a qualified owner under § 54C(d)(2) that is a “public power provider” and is a State utility with a service obligation, as such
terms are defined in § 217 of the Federal Power Act (as in effect on October 3, 2008), as demonstrated by the attached
documents included as Exhibit C. For this purpose, supporting documents should include copies of the articles of
incorporation and bylaws of the electric utility.

Bulletin No. 2015–10

707

March 9, 2015

If the expected qualified owner of the project is described in more than one category of qualified owners under § 54C(d)(2), (3),
or (4), the Applicant must identify only one such category for which it is seeking volume cap for the project.
An Application for a project to be owned by a governmental body or cooperative electric company must include:
(i) a certification that the expected qualified owner of the project is not a public power provider under section § 54C(d)(2).
(ii) a statement that the aggregate amount of New CREB volume cap requested along with allocations previously received
under Notice 2015-12 by it and members of the same controlled group, as defined in Treasury Regulation § 1.150 –1(e),
does not exceed the Volume Cap Limit in effect as of the submission date of the Application.
Each Application must state that the Applicant and members of the same controlled group are not seeking separate allocations
for the same project costs.
8. Qualified Renewable Energy Facility. The Project is one or more qualified renewable energy facilities within the meaning
of § 54C(d)(1) of the Code because it is a “qualified facility” (as determined under § 45(d) of the Code without regard to § 45(d)(8)
and (10) and without regard to any placed in service date or associated construction commencement date) that is (select as appropriate)—
(1) a wind facility – a facility using wind to produce electricity;
(2) a closed-loop biomass facility – a facility using closed-loop biomass (as defined in § 45(c)) to produce electricity or a facility using
closed-loop biomass to produce electricity which is modified to use closed-loop biomass to co-fire with coal, with other biomass, or
with both, but only if the modification is approved under the Biomass Power for Rural Development Programs or is part of a pilot
project of the Commodity Credit Corporation;
(3) an open-loop biomass facility – a facility using open-loop biomass (as defined in § 45(c)) to produce electricity and in the case of a
facility using agricultural livestock waste nutrients, the nameplate capacity rating of which is not less than 150 kilowatts;
(4) a geothermal or solar energy facility – a facility using geothermal energy (as defined in § 45(c)) or solar energy to produce
electricity (not including a facility described in § 48(a)(3) the basis of which is taken into account by the taxpayer for
purposes of determining the energy credit under § 48 of the Code);
(5) a small irrigation power facility – a facility using small irrigation power (as defined in § 45(c)) to produce electricity;
(6) a landfill gas facility – a facility producing electricity from gas derived from the biodegradation of municipal solid waste
(as defined in § 45(c));
(7) a trash combustion facility – a facility that burns municipal solid waste (as defined in § 45(c)) to produce electricity;
(8) a qualified hydropower facility – a facility engaged in qualified hydropower production (as defined in § 45(c)); or
(9) a marine and hydrokinetic renewable energy facility – a facility producing electricity from marine and hydrokinetic
renewable energy (as defined in § 45(c)) with a nameplate capacity of at least 150 kilowatts.
9. Construction Commencement Date and Placed in Service Date. (If the Application is for more than one facility, a separate
statement must be included for each facility.) The construction, installation and equipping of the facility began or is expected to begin
on ______________________. The facility is expected to be placed into service on or before _________________.
10. Independent Engineer’s Certificate (If the Application is for more than one facility, a separate certificate must be included
for each facility.) Attached as Exhibit D hereto is a certification by an independent, licensed engineer to the effect that each facility
in the Project will meet the requirements for a “qualified facility” (as determined under § 45(d) of the Code (without regard to
§ 45(d)(8) and (10) and without regard to any placed in service date or associated construction commencement date), and that each
facility, upon being placed in service, is reasonably expected to produce electricity.
11. Location of the Project.
Project address or physical location (do not include postal box
numbers or mailing address) __________________________________________________
City _________________________ State ___________________ Zip _______
County where Project is located ___________________
12. Individual to contact for more information about the Project.
Name ________________________________________
Title ________________________________________
Company Name ________________________________________
Street Address ________________________________________
City _________________________ State ___________________ Zip _______
Telephone Number _____________________
Fax Number _____________________

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(Include as appropriate) The contact person is not an authorized official or officer of the Applicant and a properly executed Form
8821 (or Form 2848) is included with this Application that authorizes the disclosure by the IRS of information that relates to this
Application and the Project(s) described above to the contact person.
13. Approvals. Include in the attached Exhibit E a certification that all required Federal, State, and local approvals (regulatory and
otherwise) for the Project, the proposed New CREBs, and any other required financing for the Project have been obtained or, if any
approvals have not yet been obtained, a certification that the Applicant reasonably expects to receive all required approvals in time to permit
issuance of the proposed bonds before the expiration of the volume cap allocation. In addition, include in the attached Exhibit E any
required approvals that have not been obtained and describe the Applicant’s plan and expected time frame for obtaining such approvals.
14. Plan of financing. Include in the attached Exhibit F a plan of financing for the Project which includes: a reasonably detailed
description of the plan of financing which includes (1) the amount of New CREBs expected to be issued together with a description of how
proceeds of such bonds will be allocated to the project, (2) any other reasonably expected sources of financing for the project together with
a description of how such financing will be allocated to the project, and (3) documentation from an independent third party who is
knowledgeable about the marketability of municipal bonds evidencing that the proposed bonds are reasonably expected to be marketed
prior to the expiration of the volume cap allocation set forth in section 5.e. of Notice 2015–12. Documentation that may be used to
meet this requirement for the proposed bonds includes the following: a bond purchase commitment letter from an investor; a credit
enhancement commitment letter from a financial institution; a letter from an underwriter or financial advisor to the effect that the
sale of the proposed bonds is likely to be completed in time to permit issuance of the proposed bonds before the expiration of the
volume cap allocation for the proposed bonds; documentation similar to the foregoing documentation; or a combination of the
foregoing documentation.
15. Compliance with federal tax laws. Include in the attached Exhibit G a certification that the Applicant reasonably expects
that the proposed bonds will meet the applicable requirements of §§ 54A and 54C and that the Applicant has engaged bond counsel
to render an opinion to the effect that the proposed bonds will meet those requirements.
16. Certification of readiness to issue. Include in the attached Exhibit H a certification that the Applicant reasonably expects
to use the volume cap allocation by issuing New CREBs prior to the expiration of the volume cap allocation.
17. Certain forfeitures. The Applicant must either (i) include in the attached Exhibit I a certification that no previous forfeitures
or expirations of volume cap occurred with respect to volume cap allocated under Notice 2015–12; or (ii) if the Applicant previously
received an allocation of volume cap under Notice 2015–12 that was forfeited or expired and reverted to the IRS (in whole or in part),
then the Applicant must include in the attached Exhibit I an identification of such previous allocation and explain the reasons for such
prior forfeiture or expiration.
18. Reimbursements. (For reimbursements, include the following statement.) The owner of the Project intends to use the
proceeds of New CREBs to reimburse amounts that the owner paid with respect to the Project in accordance with § 54A(d)(2)(D).
The Applicant certifies that the requirements of § 54A(d)(2)(D) will be met with respect to any such reimbursement.
19. Dollar amount of allocation requested for the Project. The Applicant hereby requests a New CREBs volume cap allocation
in the amount of $________________.
20. Penalty of perjury statement and signatures.
I hereby certify that I am an authorized officer or official of the Applicant, that I am duly authorized to execute legal documents
on behalf of the Applicant in connection with incurring debt, and that I am duly authorized to execute legal documents on behalf
of the Applicant in making this Application. Under penalties of perjury, I declare that (i) I have knowledge of the relevant facts and
circumstances relating to this Application and the Project(s) described herein, and (ii) I have examined this Application and the
supporting documents, and to the best of my knowledge and belief, all of the facts contained in this Application, any supplemental
submission, and the supporting documents are true, correct, and complete.
By: ________________
Name: ________________
Title: ________________
Date: ________________

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EXHIBIT A
DESCRIPTION OF THE PROJECT
(RESPONSE TO QUESTION 4 OF THE APPLICATION)

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710

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EXHIBIT B
DESCRIPTION OF PROJECT COSTS
(RESPONSE TO QUESTION 5 OF THE APPLICATION)

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March 9, 2015

EXHIBIT C
DOCUMENTS DESCRIBING QUALIFIED ISSUERS AND QUALIFIED OWNER’S ORGANIZATIONAL STATUS
(RESPONSE TO QUESTIONS 2 AND 7 OF THE APPLICATION)

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EXHIBIT D
(RESPONSE

ENGINEER’S CERTIFICATE
QUESTION 10 OF THE APPLICATION)

TO

Dated: ___________
This certificate is being provided to the Internal Revenue Service (“IRS”) in connection with an application (the “Application”) by [Name of Applicant Issuer ___________________________] (the “Issuer”) to the IRS requesting an allocation of
volume cap authority to issue new clean renewable energy bonds (“New CREBs”) under § 54C of the Internal Revenue Code,
as amended (the “Code”). The New CREBs are being issued to finance the costs of a [insert type of qualified renewable energy
facility described in Code § 45(d), or a portion thereof,] owned by [Name of qualified renewable energy facility owner
______________________________] described more particularly in the Application (the “Project”). The undersigned hereby
certifies as follows:
1. I am an independent, licensed engineer, duly qualified to practice the profession of engineering under the laws of the State of
______________, and I am not an officer or employee of the Issuer.
2. I have reviewed the Application for a New CREBs volume cap allocation (including the exhibits thereto) of the Issuer of even
date herewith describing the Project. To the best of my knowledge, information, and belief, the facility will meet the
requirements to be a “qualified renewable energy facility” under section 54C(d)(1) of the Code and correspondingly a
“qualified facility” under § 45(d) of the Code (determined without regard to § 45(d)(8) and (10) and to any placed in service
date or associated construction commencement date).
3. To the best of my knowledge, information and belief, the facility, upon being placed in service, is reasonably expected to
produce electricity.
IN WITNESS WHEREOF, I have hereunto affixed my official signature on the date of this Engineer’s Certificate.
By: _________________________________
Seal and/or License number:
Name:________________________________
Title: ________________________________
Company:____________________________

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March 9, 2015

EXHIBIT E
(RESPONSE

March 9, 2015

TO

APPROVALS
QUESTION 13 OF

714

THE

APPLICATION)

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EXHIBIT F
(RESPONSE

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TO

PLAN OF FINANCING
QUESTION 14 OF THE APPLICATION)

715

March 9, 2015

EXHIBIT G
COMPLIANCE WITH FEDERAL TAX LAWS
(RESPONSE TO QUESTION 15 OF THE APPLICATION)

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EXHIBIT H
STATEMENT OF READINESS TO ISSUE
(RESPONSE TO QUESTION 16 OF THE APPLICATION)
I hereby certify that I am an authorized officer or official of the Applicant, that I am duly authorized to execute legal documents
on behalf of the Applicant in connection with incurring debt, and that I am duly authorized to execute legal documents on behalf
of the Applicant in making this Application. I certify that the Applicant reasonably expects to issue the New Clean Renewable Energy
Bonds pursuant to the allocation of volume cap for those bonds to be received pursuant to the Application prior to the expiration date
of the volume cap allocation.
By: ____________________________________
Name: __________________________________
Title: ____________________________________
Date: ____________________________________

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March 9, 2015

EXHIBIT I
(RESPONSE

March 9, 2015

CERTAIN FORFEITURES
QUESTION 17 OF THE APPLICATION)

TO

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APPENDIX B
CONSENT TO PUBLIC DISCLOSURE
OF CERTAIN NEW CLEAN RENEWABLE ENERGY BOND
APPLICATION INFORMATION
In the event that the Application of [Name of Applicant _________________________] (Applicant) for an allocation of authority
to issue new clean renewable energy bonds (New CREBs) under § 54C of the Internal Revenue Code (Code) is approved, the
undersigned authorized representative of the Applicant hereby consents to the disclosure by the Internal Revenue Service through
publication of a public release on the IRS web site at http://www.irs.gov/Tax-Exempt-Bonds of the name of Applicant (issuer), the
name of the qualified renewable energy facility owner (if other than the issuer), the type and location of the facility that is the subject
of the Application, and the amount of the allocation, if any, of volume cap authority to issue New CREBs for such facility. The
undersigned understands that this information might be published, broadcast, discussed, or otherwise disseminated in the public
record.
This authorization shall become effective upon the execution hereof. Except to the extent disclosure is authorized herein, the
returns and return information of the undersigned taxpayer are confidential and are protected by law under the § 6103 of the Code.
I certify that I have the authority to execute this consent to disclose on behalf of the taxpayer named below.
Date: __________________

Signature: _________________________
Print name: _________________________
Title: _________________________

Name of Applicant-Taxpayer: ___________________________________
Taxpayer Identification Number: _________________________________
Taxpayer’s Address:

____________________________________________
____________________________________________
____________________________________________

Note: Income Tax Regulations require that the Internal Revenue Service must receive this consent within 60 days after it is signed
and dated.

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APPENDIX C
CONFIRMATION OF ACCEPTANCE OF LESSER ALLOCATION AMOUNT AND
CERTIFICATION OF ACCURACY OF APPLICATION INFORMATION BASED ON
THE LESSER ALLOCATION AMOUNT
This certificate is being provided to the Internal Revenue Service (“IRS”) in connection with an application (the “Application”)
by [Name of Applicant: ___________________________] (the “Applicant”) to the IRS requesting an allocation of volume cap
authority to issue new clean renewable energy bonds (“New CREBs”) under § 54C of the Internal Revenue Code, as amended (the
“Code”). The New CREBs are being issued to finance costs of certain qualified renewable energy facility or facilities described more
particularly in the Application (the “Project”). The undersigned hereby certifies as follows:
1. The Applicant requested volume cap pursuant to the Application in the amount of $__________. Because the amount of
volume cap requested in applications satisfying the requirements of Notice 2015–12 exceeds the amount of volume cap
available for allocation, the Applicant was notified by the IRS that it could receive an allocation of $_________.
2. The Applicant confirms its decision to accept the allocation in the amount of $__________.
3. The Applicant certifies that the certifications and other information included in the Application pursuant to section 3.02.e. of
Notice 2015–12, and supplemented as necessary in attachments to this certification, are accurate (subject to provisions of
section 7.a. of the Notice relating to insubstantial deviations) based on an amount of allocation requested that is equal to the
reduced allocation amount.
I hereby certify that I am an authorized officer or official of the Applicant, that I am duly authorized to execute legal documents
on behalf of the Applicant in connection with incurring debt, and that I am duly authorized to execute legal documents on behalf
of the Applicant with respect to this certificate and the underlying Application.
Under penalties of perjury, I declare that (i) I have knowledge of the relevant facts and circumstances relating to this certificate,
the underlying Application and the Project(s), and (ii) I have examined this certificate, the underlying Application, and the supporting
documents, and, to the best of my knowledge and belief, all of the facts contained in this certificate, and the supporting documents
are true, correct, and complete.
By: __________________________________
Name: _______________________________
Title: ________________________________
Date: ____________________________________

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APPENDIX D
CONFIRMATION OF DELAYING DECISION ON WHETHER TO ACCEPT LESSER
ALLOCATION
This certificate is being provided to the Internal Revenue Service (“IRS”) in connection with an application (the “Application”)
by [Name of Applicant: ___________________________] (the “Applicant”) to the IRS requesting an allocation of volume cap
authority to issue new clean renewable energy bonds (“New CREBs”) under § 54C of the Internal Revenue Code, as amended (the
“Code”). The New CREBs are being issued to finance costs of certain qualified renewable energy facility or facilities described more
particularly in the Application (the “Project”). The undersigned hereby certifies as follows:
The Applicant requests to delay its decision on whether to accept the proposed lesser amount until not later than
_____________[insert date that is no later than 90 days from the submission date]. The Applicant understands that
an allocation in the full amount of its request may be made if sufficient volume cap for its request becomes available
prior to such date.
I hereby certify that I am an authorized officer or official of the Applicant, that I am duly authorized to execute legal documents
on behalf of the Applicant in connection with incurring debt, and that I am duly authorized to execute legal documents on behalf
of the Applicant with respect to this certificate and the underlying Application. Under penalties of perjury, I declare that (i) I have
knowledge of the relevant facts and circumstances relating to this certificate, the underlying Application and the Project(s), and (ii)
I have examined this certificate, the underlying Application, and the supporting documents, and, to the best of my knowledge and
belief, all of the facts contained in this certificate, and the supporting documents are true, correct, and complete.
By: __________________________________
Name: _______________________________
Title: ________________________________
Date: ____________________________________

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Work Opportunity Tax
Credit (WOTC) Extension
for 2014
Notice 2015–13
I. PURPOSE
This notice provides guidance on § 119
of the Tax Increase Prevention Act of
2014 (the Act), Pub. L. No. 113-295, enacted on December 19, 2014, and transition relief for employers claiming the
Work Opportunity Tax Credit (WOTC)
under §§ 51 and 3111(e) of the Internal
Revenue Code, as extended by the Act.
Section 119 of the Act amends § 51 to
extend the WOTC, including the reduced
credit under § 3111(e) for qualified taxexempt organizations, through December
31, 2014. Specifically, this notice provides employers that hire members of targeted groups additional time beyond the
28-day deadline in § 51(d)(13) for submitting Form 8850, Pre-Screening Notice and
Certification Request for the Work Opportunity Credit, to Designated Local Agencies (DLAs).
II. BACKGROUND
Section 51 provides the WOTC for employers that hire individuals who are
members of targeted groups. Before an
employer may claim the WOTC, the employer must obtain certification that the
hired individual is a targeted group member. Certification of an individual’s targeted group status is obtained from a
DLA. A DLA is a State employment security agency established in accordance
with 29 U.S.C. §§ 49 – 49n. An employer
must submit Form 8850 to the DLA not
later than the 28th day after the individual
begins work for the employer.
The Returning Heroes and Wounded
Warriors Work Opportunity Tax Credits,
contained in § 261 of the VOW to Hire
Heroes Act of 2011, Pub. L. No. 112-056
(the VOW Act), amended § 51 to extend
and expand the WOTC to employers hiring certain qualified veterans (as defined
in § 51(d)(3)). The VOW Act also
amended §§ 52 and 3111 to make a reduced WOTC available to organizations
described in § 501(c) and exempt from
taxation under § 501(a) (qualified taxexempt organizations) as a credit against

March 9, 2015

the employer share of social security tax
imposed under § 3111(a) for qualified taxexempt organizations hiring qualified veterans. The American Taxpayer Relief Act
of 2012, Pub. L. No. 112-240 (ATRA),
enacted on January 3, 2013, extended the
WOTC for certain taxpayers through December 31, 2013. For guidance on changes
made to the WOTC by the VOW Act and
ATRA, see Notice 2012–13, 2012–9 I.R.B.
421, and Notice 2013–14, 2013–13 I.R.B.
712, respectively.
III. TRANSITION RELIEF
Section 51(d)(13)(A) provides that an
individual is not treated as a member of a
targeted group unless (1) on or before the
day the individual begins work, the employer obtains certification from the DLA
that the individual is a member of a targeted group; or (2) the employer completes a pre-screening notice (Form 8850)
on or before the day the individual is
offered employment and submits such notice to the DLA to request certification not
later than 28 days after the individual begins work. Because the Act extended the
WOTC retroactively for 2014 for members of targeted groups, employers need
additional time to comply with the requirements of § 51(d)(13)(A). Accordingly, a
taxable employer that hired a member of a
targeted group (as defined in §§ 51(d)(2)
through (10)), or a qualified tax-exempt
organization that hired a qualified veteran
described in § 51(d)(3), on or after January 1, 2014, and before January 1, 2015,
will be considered to have satisfied the
requirements of § 51(d)(13)(A)(ii) if it
submits the completed Form 8850 to the
appropriate DLA to request certification
not later than April 30, 2015. A timely
request for certification does not eliminate
the need for the employer to receive a
certification before claiming the credit.
DRAFTING INFORMATION
The principal author of this notice is
Shoshanna Tanner of the Office of the
Associate Chief Counsel (Tax Exempt
and Government Entities). For further information regarding the WOTC, contact
Ms. Tanner at (202) 317-5500 (not a tollfree number).

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Round 2 of Section 48A
Phase III Program under
the Qualifying Advanced
Coal Project Program
Notice 2015–14
SECTION 1. PURPOSE
This notice updates and amplifies the
procedures for the allocation of credits
under the qualifying advanced coal project program of § 48A of the Internal Revenue Code by announcing the immediate
beginning of the 2015 reallocation round
(“Round 2”) of the § 48A Phase III program. Except as specifically provided in
this notice, this allocation round will be
conducted in the same manner and under
the same procedures as provided under
Notice 2012–51, 2012–2 C.B. 150, which
established the § 48A Phase III program.
To be considered in Round 2 of the § 48A
Phase III program, applications must be
submitted to the Department of Energy
(“DOE”) (“application for DOE certification”) and to the Internal Revenue Service
(“Service”) (“application for § 48A certification”) on or before April 1, 2015. See
Section 3 of this notice for additional rules
regarding these applications.
SECTION 2. BACKGROUND
.01 Section 46 provides that the amount
of the investment credit for any taxable year
is the sum of the credits listed in § 46. That
list includes the qualifying advanced coal
project credit under § 48A.
.02 Section 48A(d)(1) provides that the
Secretary, in consultation with the Secretary of Energy, shall establish a qualifying
advanced coal project program for the deployment of advanced coal-based generation technologies. The Treasury Department and the Service established the
§ 48A Phase I program in Notice 2006 –
24, 2006 –1 C.B. 595, as modified and
updated by Notice 2007–52, 2007–1 C.B.
1456.
.03 Pursuant to § 48A(d)(3)(B)(i) and
(ii), the § 48A Phase I program provided
for (i) $800 million of credits to be allocated to integrated gasification combined
cycle projects and (ii) $500 million of
credits to other advanced coal projects.
The Service allocated credits through an-

Bulletin No. 2015–10

nual allocation rounds in 2006, 2007– 08,
and 2008 – 09, and a special allocation
round in 2008.
.04 Pursuant to § 48A(d)(3)(B)(iii), the
Treasury Department and the Service established the § 48A Phase II program by
issuing Notice 2009 –24, 2009 –1 C.B.
817, to allocate an additional $1.25 billion
of credits for advanced coal-based generation technology projects. The Service allocated credits through two allocation
rounds in 2009 –10 and 2011–12.
.05 Pursuant to § 48A(d)(4), the Treasury Department and the Service issued
Notice 2012–51, 2012–2 C.B. 150, to establish the § 48A Phase III program to
reallocate $658.5 million of Phase I credits. In Announcement 2013– 43, 2013–2
C.B. 524, the Service announced that the
total amount of $658.5 million of credits
had been allocated, and accordingly, the
2012–13 allocation round would be the
only allocation round in Phase III.
.06 The Service has since determined
that $1,104,000,000 of § 48A credits are
available for reallocation due to forfeitures of previously allocated Phase I and
Phase II credits and unallocated Phase II
credits. Accordingly, the Treasury Department and the Service have determined that an additional allocation
round is appropriate, and this notice
therefore begins Round 2 of the § 48A
Phase III program.
SECTION 3. SECTION 48A PHASE III
PROGRAM
.01 Except as otherwise specifically
provided in this notice, Round 2 of the
§ 48A Phase III program will be conducted in the same manner and under the
same procedures as provided under Notice
2012–51. This notice restates or references certain provisions in Notice
2012–51 as a convenience to taxpayers.
The restatement or referencing of these
provisions does not diminish the effect of
provisions that are not restated or referenced.
.02 For Round 2 of the § 48A Phase III
program, § 48A Phase III credits in the
amount of $1,104,000,000 are available
for reallocation. The credits will not be
separated into pools based on the type of
projects or the type of primary feedstock.
.03 The § 48A Phase III credit for a
taxable year is an amount equal to 30

Bulletin No. 2015–10

percent of the qualified investment (as defined in § 48A(b)) for that taxable year in
a qualifying advanced coal project (as defined in § 48A(c)(1) and § 48A(e)). This
rule applies to both facilities that use an
integrated gasification combined cycle (as
defined in § 48A(c)(7)) and facilities that
use other advanced coal-based generation
technologies (as defined in § 48A(f)).
.04 For Round 2 of the § 48A Phase III
program, the application period for § 48A
certification begins on February 18, 2015,
and ends on April 1, 2015. See section
3.07 for the date by which the application
for DOE certification must be submitted
to DOE. For purposes of determining the
timeliness of submission of an application
for § 48A certification by the Service, the
rules of § 7502 shall apply.
.05 The Service will consider a project
under Round 2 of the § 48A Phase III
program only if the application for § 48A
certification for the project is submitted
during the application period and DOE
provides the DOE certification and ranking (if any) for the project on or before
April 22, 2015.
.06 If an application for DOE certification does not include all of the information required by section 5.02 of Notice
2012–51, DOE may decline to accept the
application. If an application for § 48A
certification does not include all of the
information listed in section 5.03 of Notice 2012–51, the application will not be
accepted by the Service.
.07 For Round 2 of the § 48A Phase III
program, DOE will consider an application for DOE certification only if the application is postmarked on or before April
1, 2015. See section 5.02 of Notice
2012–51 and Appendix B to this notice
for the information to be submitted to
DOE in an application for DOE certification. Appendix B to this notice also provides the instructions and address for filing the application for DOE certification.
DOE will determine the technical and
economic feasibility of the project and, if
the project is determined to be feasible,
will provide a DOE certification for the
project to the Service. If DOE certifies
two or more projects, DOE also will rank
each of the projects it certifies (for example, first, second, third, etc.) relative to
other certified projects and credits will be
allocated to projects based on DOE rank-

723

ing. DOE will provide DOE certification
for projects determined to be feasible and
DOE ranking (if any) to the Service by
April 22, 2015.
.08 By April 30, 2015, the Service will
accept or reject the taxpayer’s application
for § 48A certification and will notify the
taxpayer, by letter, of its decision.
.09 If the taxpayer’s application for
§ 48A certification is accepted, the acceptance letter will state the amount of
the credit allocated to the project. If a
credit is allocated to a taxpayer’s project, the taxpayer will be required to execute an agreement in the form set forth
in Appendix A to this notice. By May
29, 2015, the taxpayer must execute and
return the agreement to the Service at
the appropriate address listed in section
5.04 of Notice 2012–51. The Service
will execute and return the agreement to
the taxpayer by June 30, 2015. The executed agreement applies only to the
accepted taxpayer.
SECTION 4. EFFECT ON OTHER
DOCUMENTS
Notice 2012–51, 2012–2 C.B. 150, is
updated and amplified.
SECTION 5. EFFECTIVE DATE
This notice is effective on February 18,
2015.
SECTION 6. PAPERWORK
REDUCTION ACT
The collection of information contained in this notice has been reviewed
and approved by the Office of Management and Budget in accordance with the
Paperwork Reduction Act (44 U.S.C.
§ 3507) under control number 15452003.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays
a valid OMB control number.
The collections of information in this
notice are in section 3 and Appendix B.
This information is required to obtain an
allocation of qualifying advanced coal
project credits. This information will be
used by the Service to verify that the

March 9, 2015

taxpayer is eligible for an allocation of the
qualifying advanced coal project credits.
The collection of information is required
to obtain a benefit. The likely respondents
are business or other for-profit institutions.
The estimated total annual reporting
burden is 550 hours.
The estimated annual burden per respondent varies from 70 to 150 hours,
depending on individual circumstances,

with an estimated average of 110 hours.
The estimated number of respondents is 5.
The estimated annual frequency of responses is on occasion.
Books or records relating to a collection of information must be retained as
long as their contents may become material in the administration of any internal
revenue law. Generally, tax returns and
tax return information are confidential, as
required by 26 U.S.C. § 6103.

SECTION 7. DRAFTING
INFORMATION
The principal author of this notice is
Jennifer C. Bernardini of the Office of
Associate Chief Counsel (Passthroughs &
Special Industries). For further information regarding this notice contact Ms. Bernardini on (202) 317-6853 (not toll-free
numbers).

APPENDIX A
AGREEMENT
[Insert taxpayer’s name, address, and identifying number] (“Taxpayer”) and the Commissioner of Internal Revenue (“Commissioner”) make the following Agreement:
WHEREAS:
1. On or before April 1, 2015, Taxpayer submitted to the Internal Revenue Service (“Service”), an application for certification
under Round 2 of the § 48A Phase III program described in Notice 2015–14 (“Application for § 48A Certification”).
2. Taxpayer’s Application for § 48A Certification in Round 2 is for the project described below (the “Project”):
(a) The Project will use an advanced coal-based generation technology (as defined in § 48A(c)(2) and (f)).
(b) The Project will be located at [insert address or other identifying designation].
(c) The Project site in subsection (b) above may be changed only if the change is consistent with the objectives of the qualifying
advanced coal project program, is requested by the taxpayer that received the credit allocation, and involves moving the Project site
to improve the potential to capture and sequester CO2 emissions, reduce costs of transporting feedstock, and serve a broader customer
base. The Service will not agree to a project site change if the dollar amount of tax credits allocated to the taxpayer under § 48A
would increase as a result of the site change or if the Project would not have been originally certified had such modification been
included in the taxpayer’s application.
(d) The Project is [insert either: “a new electric generation unit (as defined in § 48A(c)(6))”; “a retrofit of an existing electric
generation unit (as defined in § 48A(c)(6))”; or “a repower of an existing electric generation unit (as defined in § 48A(c)(6)).”]
(e) The Project will have a total nameplate generating capacity (as defined in section 3.02 of Notice 2012–51) of at least [insert
number] megawatts.
(f) At all times at least 75 percent of the cumulative total fuel input (as defined in section 3.03(1) of Notice 2012–51) used during
normal plant operations (as defined in section 3.03(2) of Notice 2012–51) for the Project will be coal (as defined in section 3.01 of
Notice 2012–51).
3. On [insert date of acceptance letter issued under Notice 2015–14], the Service accepted Taxpayer’s Application for § 48A
Certification for the Project and allocated qualifying advanced coal project credit under § 48A in the amount of $[insert number] to
the Project.
4. Taxpayer understands that if Taxpayer fails to satisfy any of the certification requirements in § 48A(e)(2) within the time
specified in § 48A(d)(2)(D) (2 years from the date specified in WHEREAS clause #3), or if the Service does not issue a certification
for the Project under Notice 2015–14, the § 48A Phase III credit in the amount specified in WHEREAS clause #3 allocated to the
Project in Round 2 is fully forfeited.
5. Taxpayer understands that if the Project fails to attain or maintain the separation and sequestration of CO2emissions required
by § 48A(e)(1)(G), the § 48A Phase III credit in the amount specified in WHEREAS clause #3 allocated to the Project in Round 2
will be recaptured pursuant to § 50.
6. Taxpayer understands that if the Project is not placed in service by Taxpayer within 5 years of the date of issuance of the
certification as determined under section 6.03 of Notice 2012–51, the § 48A Phase III credit in the amount specified in WHEREAS
clause #3 allocated to the Project in Round 2 is fully forfeited. Taxpayer must provide evidence to the Service that the Project has
been timely placed in service.
7. Taxpayer understands that if the plans for the Project change in any significant respect from the plans set forth in the application
for DOE certification (as defined in section 5.02 of Notice 2012–51) and the Application for § 48A Certification (as defined in section
5.03 of Notice 2012–51) and, under section 7.01 of Notice 2012–51, the acceptance of Taxpayer’s Application for § 48A
Certification on the date specified in WHEREAS clause #3 is void, the § 48A Phase III credit in the amount specified in WHEREAS
clause #3 allocated to the Project in Round 2 is fully forfeited.

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8. Taxpayer understands that if the Project fails to satisfy any of the requirements in § 48A(e)(1)(A), (C), (D), (E), and (F) for
a qualifying advanced coal project or, during normal plant operations (as defined in section 3.03(2) of Notice 2012–51), fails to
satisfy the requirement in § 48A(e)(1)(B) for a qualifying advanced coal project—
(a) at the time the Project is placed in service, § 48A Phase III credit in the amount specified in WHEREAS clause #3 allocated
to the Project in Round 2 is fully forfeited; and
(b) after the Project is placed in service (and after satisfying all such requirements at the time the Project is placed in service),
the Project ceases to be investment credit property and the recapture rules of § 50(a) apply.
9. Taxpayer understands that if at any time more than 25 percent of the cumulative total fuel input (as defined in section 3.03(1)
of Notice 2012–51) used during normal plant operations (as defined in section 3.03(2) of Notice 2012–51) is not coal (as defined
in section 3.01 of Notice 2012–51), the Project ceases to be investment credit property and the recapture rules of § 50(a) apply.
10. Taxpayer cannot claim the qualifying gasification project credit under § 48B for any qualified investment for which the
qualifying advanced coal project credit is allowed under §48A.
11. Taxpayer understands that if Taxpayer elects to claim the qualifying advanced coal project credit on the qualified progress
expenditures paid or incurred by Taxpayer during the taxable year(s) during which the Project is under construction and the Project
ceases to be a qualifying advanced coal project (whether before, at the time, or after the Project is placed in service), rules similar
to the recapture rules in § 50(a)(2)(A) through (D) apply.
12. This Agreement applies only to Taxpayer. Taxpayer must notify the Service within 90 days of the acquisition of the Project
by any other person (a successor in interest). A successor in interest that plans to claim the § 48A credit allocated to the Project must
request permission to execute a new agreement with the Service.
If the request is granted, the new agreement must be executed no later than the due date (including extensions) of the successor
in interest’s Federal income tax return for the taxable year in which the transfer occurs. If the interest is acquired at or before the
time the Project is placed in service and the successor in interest fails to execute a new agreement, the § 48A Phase III credit in
the amount specified in WHEREAS clause #3 allocated to the Project in Round 2 is fully forfeited. If the interest is acquired after
the time the Project is placed in service and the successor in interest fails to execute a new agreement, the Project ceases to be
investment credit property and the recapture rules of § 50(a) apply.
NOW IT IS HEREBY DETERMINED AND AGREED FOR FEDERAL INCOME TAX PURPOSES THAT:
1. The total amount of the § 48A Phase III credit that Taxpayer will claim for the Project under this Agreement on account of
the acceptance of Taxpayer’s Application for § 48A Certification in Round 2 cannot exceed the amount specified in WHEREAS
clause #3.
2. This Agreement does not express whether the Taxpayer has met the certification requirements under § 48A(e)(2) or other future
requirements to receive tax credits under § 48A.
3. This Agreement is limited and applies only to Taxpayer. A successor in interest that plans to claim the § 48A credit allocated
to the Project must request permission to execute a new agreement with the Service.
THIS AGREEMENT IS FINAL AND CONCLUSIVE EXCEPT:
1. The matter it relates to may be reopened in the event of fraud, malfeasance, or misrepresentation of a material fact;
2. It is subject to the Internal Revenue Code sections that expressly provide that effect be given to their provisions (including any
stated exception for § 7122) notwithstanding any law or rule of law; and
3. If it relates to a tax period ending after the date of this Agreement, it is subject to any law enacted after such date, which applies
to the tax period.
By signing, the parties certify that they have read and agreed to the terms of this Agreement.
Taxpayer: [insert name and identifying number]
By: __________________________________ Date Signed: ____________
[insert name]
Title: [insert title]
[insert taxpayer’s name]
Commissioner of Internal Revenue
By: _________________________________ Date Signed: ____________
Kathy J. Robbins
Title: Industry Director, Natural Resources & Construction

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APPENDIX B
APPLICATION FOR DOE CERTIFICATION
REQUEST FOR SUPPLEMENTAL APPLICATION INFORMATION FOR DOE
The Internal Revenue Service (“Service”) and the Department of Energy (“DOE”) seek to certify applications that demonstrate
a high likelihood of being successfully implemented by the applicants. To qualify, projects must be technically and economically
feasible and use the appropriate clean coal technology.
This request for submission of supplemental application information:
• Describes the information to be provided by the applicant seeking a certification of feasibility from DOE, and
• Lists the evaluation criteria and Program Policy Factors to be used by DOE in the evaluation of applications.
If after review by DOE a project is determined to be feasible, DOE will provide a DOE certification of feasibility to the Service.
The Service will then accept or reject the taxpayer’s application for certification of tax credit.
In conducting this evaluation DOE may utilize assistance and advice from qualified personnel from other Federal agencies and/or
non-conflicted contractors. DOE will obtain assurances in advance from all evaluators that application information shall be kept
confidential and used only for evaluation purposes. DOE reserves the right to request clarifications and/or supplemental information
from some or all applicants through written submissions and/or oral presentations.
Notice is given that DOE may determine whether or not to provide a certification to the Service at any time after the application
has been received, without further exchanges or discussions. Therefore, all applicants are advised to submit their most complete and
responsive application.
Applications will not be returned.
A. General
This request, together with the information in relevant sections of Notice 2012–51 includes all the information needed to complete
an application for DOE certification. All applications shall be prepared in accordance with this request in order to provide a standard
basis for evaluation and to ensure that each application will be uniform as to format and sequence.
Each application should clearly demonstrate the applicant’s capability, knowledge, and experience regarding the requirements
described herein.
Applicants should fully address the requirements of Notice 2012–51 and this request and not rely on the presumed background
knowledge of reviewers. DOE may reject an application that does not follow the instructions regarding the organization and content
of the application when the nature of the deviation and/or omission precludes meaningful review of the application.
B. Unnecessarily Elaborate Applications
Unnecessarily elaborate brochures or other presentations beyond those sufficient to present a complete and effective application
are not desired. Elaborate art work, graphics and pictures are neither required nor encouraged.
C. Application Submission for DOE Certification
The application submission to DOE must include the information and documentation required by relevant sections of Notice
2012–51.
An application to DOE will not be considered in Round 2 of the § 48A Phase III program unless it is postmarked by April 1, 2015.
One electronic version on a USB flash drive or a CD of the application must be submitted to:
Gina Mick
National Energy Technology Laboratory
3610 Collins Ferry Road
Morgantown, WV 26507
Note that under section 5.03(4) of Notice 2012–51, one electronic version of the application for DOE certification must be sent
to the Service as part of the application for § 48A certification. The application for § 48A certification will not be considered in Round
2 under this notice unless it is submitted to the Service before April 1, 2015.
THE INFORMATION REQUIRED BY THIS REQUEST MUST BE SUBMITTED USING THE FORMAT AND THE
HEADINGS OF THE “PROJECT INFORMATION MEMORANDUM” AS DESCRIBED BELOW.
To aid in evaluation, applications shall be clearly and concisely written and logically assembled. All pages of each part shall be
appropriately numbered and identified with the name of the applicant and the date.

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The application, including the Project Information Memorandum, MUST be formatted in one of the following software
applications:
• Microsoft Wordtm 2010 or later edition
• Microsoft Exceltm 2010 or later edition
• Adobe Acrobattm PDF 7.0 or later edition
Financial models should be submitted using the Exceltm spreadsheet and must include calculation formulas and assumptions.
The applicant is responsible for the integrity and structure of the electronic files. DOE will not be responsible for reformatting,
restructuring or converting any files submitted in response to this request.
The Project Information Memorandum, excluding Appendices, shall not exceed seventy-five (75) pages. Pages in excess of the
page limitation will not be considered for evaluation. All text shall be typed, single spaced, using 12 point font, 1 inch margins, and
unreduced 8-1/2-inch by 11-inch pages. Illustrations and charts shall be legible with all text in legible font. Pages shall be
sequentially numbered. Except as otherwise noted herein the page guidelines previously set forth constitute a limitation on the total
amount of material that may be submitted for evaluation. No material may be incorporated in any application by reference as a means
to circumvent the page limitation.
D. Project Information Memorandum
1. Summary and Introduction
a. Description of the Project
b. Financing and Ownership Structure
c. Description of the main parties to the project, including background, ownership and related experience
d. Current Project Status and Schedule to Beginning of Construction
2. Technology and Technical Information
Provide a description of the proposed technology, including sufficient supporting information (such as vendor guarantees, process
flow diagrams, equipment descriptions, information on each major process unit and the total plant, compositions of major streams,
and the technical plan for achieving the goals proposed for the project) as would be needed to allow DOE to confirm that the technical
requirements of § 48A are met. Specifically the applicant should:
• Provide evidence sufficient to demonstrate that the proposed technology meets the definition of “Advanced Coal-Based Generation
Technology,” either as integrated gasification combined cycle (“IGCC”) technology, or other advanced coal-based electric generation
technology meeting the heat rate requirement of 8530 Btu/kWh.
• For advanced coal-based electric generation:
X The applicant must provide evidence sufficient to justify the actual heat rate and heat rate corrected to conditions specified in
§ 48A(f)(2).
X For projects including existing units, the applicant must provide evidence sufficient to justify that the proposed technology
meets heat rate requirements specified in § 48A(f)(3).
• Provide evidence sufficient to justify that the proposed project is designed to meet the following performance requirements:
X SO2 (subbituminous coal is 80 percent or more of fuel input). . . . . . .99 percent removal or emissions not more than 0.04
lbs/MMBTU
X SO2 (subbituminous coal is not more than 80 percent of fuel input). . . . . . . . . .99 percent removal
X SO2 (for all projects other than subbituminous coal projects). . . . . . . . .99 percent removal
X NOx emissions. . . . . . . . . . . .0.07 lbs / MMBTU
X PM emissions. . . . . . . . . . . .0.015 lbs / MMBTU
X Hg percent removal. . . . . . . 90 percent
• Provide evidence sufficient to demonstrate that the project meets the requirements for qualifying advanced coal projects as
specified under § 48A(e)(1) including:
X The project will power a new electric generation unit or retrofit/repower an existing electric generation unit. At least 50% of
the useful output of the project is electrical power.
X The fuel for the project is at least 75% coal (as defined in § 48A(c)(4) and section 3.01 of Notice 2012–51), on an energy input
basis.
X The project is located at one site and has a total nameplate electric power generating capacity (as defined in section 3.02 of
Notice 2012–51) of at least 400 MW.
X The project includes equipment that separates and sequesters at least 70 percent of such project’s total carbon dioxide (“CO2”)
emissions. The CO2 separation, capture, sequestration, and emission values shall be reported on metric tons per hour and metric
tons per year basis under normal plant operating conditions. The CO2 separation and sequestration percentages shall be
calculated based on the total CO2 that would otherwise be released into the atmosphere as industrial emission of
greenhouse gas (“CO2 emissions”).

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3. Applicant’s Capability to Accomplish the Technical Objectives
Provide a narrative supporting the Applicant’s capability to accomplish the technical objectives of the proposed project, including
supporting documentation demonstrating that the applicant has assembled a team that is formally committed to participate in the
proposed project.
Provide information to support that the applicant has assembled a team with the skills and resources needed to implement the
project as proposed. Provide signed agreements or letters from team members demonstrating that the proposed team members are
fully committed to the project.
Provide information, including examples of prior similar projects completed by applicant, engineering-procurement-construction
(“EPC”) contractor, and suppliers of major subsystems or equipment, which support the capabilities of the applicant and its team
members to design, construct, permit, and operate the facility. The applicant should demonstrate that the team members have a
corporate history of successful completion of similar projects.
Provide information to support that key personnel of the applicant and its team members have knowledge, experience, and
adequate degree of involvement to successfully implement the project.
Include the project status and relevant information from ongoing engineering activities. Also include in an appendix any
engineering report or reports used by the applicant to develop the project and to estimate costs and operating performance. Include
copies of any signed agreements to support project status claims regarding preliminary design studies, front-end engineering design
(“FEED”), and EPC-type agreements.
4. Priority for Qualifying Advanced Coal Projects
The applicant must submit information sufficient for categorization and prioritization of projects for certification, including
documentation pertaining to the following:
• High priority project factors:
ΠIncreased by-product utilization, if applicable.
Œ Research partnership with an eligible educational institution as defined in §48A(e)(3)(B)(iii), if applicable.
• Highest priority factor: Separation and sequestration percentage of total CO2 emissions.
5. Site Control and Ownership
Provide evidence that demonstrates the overall feasibility of implementing the project at the proposed site.
Provide evidence that the applicant owns or controls a site in the United States of sufficient size to allow the proposed project
to be constructed and operated on a long-term basis. Documentation such as a deed demonstrating the applicant owns the project site,
a signed option to purchase the site from the site owner, or a letter of intent signed by the site owner and stating the site owner’s
intent to sell the site to the applicant should be provided.
Describe the current infrastructure at the site available to meet the needs of the project.
Provide documentation supporting applicant’s conclusion that the proposed site can fully meet all environmental, coal supply,
water supply, transmission interconnect, and public policy requirements. Such documentation may include signed agreements, letters
of intent, or term sheets relating to coal supply, water supply, and product (e.g. CO2) transportation etc., and regulatory approvals
supporting the key claims.
Provide detailed plans, schedules and status updates, particularly for sites with pre-existing conditions that could impact the
proposed project. Pre-existing conditions may include, but are not limited to, sites with mandated environmental remediation efforts;
brown-field sites that will require building demolition; or sites requiring substantial rerouting of existing roads, railroads,
transmission lines or pipelines prior to the start of the project.
Applicants must select one “proposed site.” However, projects with key physical or logistical elements that require close
integration with another system for the project to succeed should provide information on all integrated systems regardless of where
they are located. Example 1: a power plant designed to operate exclusively on coal from a to-be-opened mine should provide
supporting documentation for the new mine. Example 2: an oxygen-blown IGCC plant planning to purchase oxygen from a third
party who will construct a plant exclusively for this project should provide documentation for the oxygen supplier. Example 3: an
IGCC plant planning to sell CO2 for enhanced oil recovery (“EOR”) should provide an agreement for such a transaction indicating
the annual CO2 purchase quantity, expected project lifetime sales, CO2 capacity of the site for EOR, and EOR site ownership.
6. Utilization of Project Output
Provide a projection of the anticipated costs of electricity and other marketable by-products produced by the plant.
Provide documentation establishing that a majority of the output of the plant is reasonably expected to be acquired or utilized.
Such documentation should be signed by authorizing officials of both the buyer and seller, and may include: Sales Agreements,
Letters of Intent, Memoranda of Understanding, Option Agreements, and Power Purchase Agreements.
Describe any energy sales arrangements that exist or that may be contemplated (e.g., a Power Purchase Agreement or Energy
Sales Agreement) and summarize their key terms and conditions.
Include as an appendix any independent Energy Price Market Study that has been done in connection with this project, or if no
independent market study has been completed, provide a copy of the applicant-prepared market study.

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Identify and describe any firm arrangements to sell non-power output, such as CO2, and provide any evidence of such
arrangements. If the project produces a product in addition to power, include as an appendix any related market study of price and
volume of sales expected for that product.
7. Project Economics
Describe the project economics and provide satisfactory evidence of economic feasibility as demonstrated through the financial
forecast and the underlying project assumptions. The project economic and financial assumptions should be clearly stated and
explained.
Show calculation of the amount of tax credit applied for based on allowable cost.
8. Project Development and Financial Plan
Provide the total project budget and major plant costs (e.g., development, operating, capital, construction, and financing costs). Provide the
estimated annual budget for and source of project development costs from the time of the application until the beginning of construction,
including legal, engineering, financial, environmental, overhead, and other development costs. Describe the overall approach
to project development and financing sufficient to demonstrate project viability. Provide a complete explanation of the source
and amount of project equity. Provide a complete explanation of the source and amount of project debt. Provide the audited
financial statements for the most recently ended three fiscal years and quarterly interim financial statements for the current
fiscal year (a) for the applicant, (b) for any of the project parties providing funding, and (c) for any third party funding source.
If the applicant or another party does not have audited financial statements, the applicant or the party should provide equivalent
financial statements prepared by the applicant or the party, in accordance with Generally Accepted Accounting Principles, and
certified as to accuracy and completeness by the Chief Financial Officer of the party providing the statements.
For internally financed projects, provide evidence that the applicant has sufficient assets to fund the project with its own resources.
Identify any internal approvals required to commit such assets. Include in an appendix copies of any board resolution or other
approval authorizing the applicant to commit funds and proceed with the project.
For projects financed through debt instruments either unsecured or secured by assets other than the project, provide evidence that
the applicant has sufficient creditworthiness to obtain such financing along with a discussion of the status of such instruments.
Identify any internal approvals required to commit the applicant to pursue such financing. Include in an appendix copies of any board
resolution or other approval authorizing the applicant to commit to such financing.
For projects financed through investor equity contributions, describe the source and status of each contribution. Discuss each
investor’s financial capability to meet its commitments. Include in an appendix, copies of any executed investment agreements.
If financing through a public offering or private placement of either debt or equity is planned for the project, provide the expected
debt rating for the issue and an explanation of applicant’s justification for the rating. Describe the status of any discussions with
prospective investment bankers or other financial advisors.
Include as an appendix copies of any existing funding commitments or expressions of interest from funding sources for the
project.
For projects employing nonrecourse or limited recourse debt financing, provide a complete discussion of the approach to, and
status of, such financing. In an appendix: (1) provide an Exceltm-based financial model of the project, with formulas, so that review
of the model calculations and assumptions may be facilitated; and (2) provide pro-forma project financial, economic, capital cost,
and operating assumptions, including detail of all project capital costs, development costs, interest during construction, transmission
interconnection costs, other operating expenses, and all other costs and expenses.
9. Project Contract Structure
Describe the current status of each of the agreements set forth below. Include as an appendix copies of the contracts or summaries
of the key provisions of each of the following agreements:
• Power Purchase Agreement (if not fully explained in section 6 above).
• Coal Supply: describe the source and price of coal supply for the project. Include as an appendix any studies of coal supply price and
amount that have been prepared. Include a summary of the coal supply contract and a signed copy of the contract.
• Coal Transportation: explain the arrangements for transporting coal, including costs.
• Operations & Maintenance Agreement: include a summary of the terms and conditions of the contract and a copy of the contract.
• Shareholders Agreement: summarize key terms and include the agreement as an appendix.
• Engineering, Procurement and Construction Agreement: describe the key terms of the existing or expected EPC contract arrangement,
including firm price, liquidated damages, hold-backs, performance guarantees, etc.
• Water Supply Agreement: confirm the amount, source, and cost of water supply.
• Transmission Interconnection Agreement: explain the requirements to connect to the system and the current status of negotiations in
this respect.
• If CO2 is to be sold to a third party for sequestration, provide a Sales Agreement and provide specifics, such as CO2 sales (metric tons
per year), expected project lifetime sales (metric tons), potential CO2 capacity of the site for sequestration (metric tons), technology
and site suitability for sequestration, and sequestration site ownership and operation.

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10. Permits Including Environmental Authorizations
Provide a complete list of all Federal, State, and local permits, including environmental authorizations or reviews, necessary to
commence construction of the project.
Explain what actions have been taken to date to satisfy the required authorizations and reviews, and the status of each.
Provide a description of the applicant’s plan to obtain and complete all necessary permits, and environmental authorizations and
reviews.
11. Steam Turbine Purchase
If applicant plans to purchase a steam turbine or turbines for the project, indicate the prospective vendors for the turbine and
explain the current status of purchase negotiations, and provide a timeline for negotiation and purchase with expected purchase date.
12. Project Schedule
Provide an overall project schedule which includes technical, business, financial, permitting and other factors to substantiate that
the project will meet the 2-year project certification and 5-year placed-in-service requirement.
The project schedule should be comprehensive and provide sufficient detail to demonstrate how applicant will meet the
certification and placed-in-service requirements. The schedule should demonstrate that the applicant understands the required tasks,
and has allowed realistic times for accomplishing the technical and financial tasks. The schedule should include the milestone
accomplishments needed to obtain the financing for the project.
Applicants should document their progress toward meeting any completion of permitting deadline. Existing permits and permit
applications must be specific to the project proposed. If existing permits are not specific for the proposed coal-based project (e.g. the
permits are for oil-fired or natural-gas-based units), specific plans, procedures and schedules for reapplying, modifying and/or
renegotiating permits should be provided. Any local, State or Federal permitting schedules that may impact the overall project
schedule should be included.
Applicant should document their progress toward obtaining engineering design information (i.e., FEED) to initiate permitting
activities and to finalize the turbine generator purchase specification within the 2-year window. Most often, this requires final site,
technology, and process selection. Signed FEED and/or EPC-type agreements, if available, should be provided.
13. Appendices
a. Copy of internal or external engineering reports.
b. Copy of site plan, together with evidence that applicant owns or controls a site. Examples of evidence would include a deed,
or an executed contract to purchase or lease the site.
c. Information supporting applicant’s conclusion that the site is fully acceptable as the project site with respect to environment,
coal supply, water supply, transmission interconnect, and public policy reasons.
d. Power Purchase or Energy Sales Agreement.
e. Energy Market Study.
f. Market Study for non-power output.
g. Financial Model of project.
h. Financial statements for the applicant and other project funding sources for the most recently ended three fiscal years, and the
unaudited quarterly interim financial statements for the current fiscal year.
i. Expressions of interest or commitment letters from funding sources.
j. For each project contract, if no contract currently exists, provide a summary of the expected terms and conditions.
k. List of all Federal, State, and local permits, including environmental authorizations or reviews, necessary to commence
construction.
E. Evaluation Criteria
Advanced coal projects will be evaluated on whether they meet all the requirements of § 48A.
Technical: will be evaluated on whether the applicant has demonstrated the capability to accomplish the technical objectives.
Site: will be evaluated on the basis that the site requirement for ownership or control has been met, and that the site is suitable
for the proposed project.
Economic: will be evaluated on whether the project has demonstrated economic feasibility, taking into consideration the submitted
financial and project development and structural information and financial plan.
Schedule: will be evaluated on the applicant’s ability to meet the 2-year project certification and the 5-year placed-in-service
requirement.
F. Program Policy Factors to Be Used by DOE in the Evaluation of Applications
Section 48A identifies minimum requirements for consideration for the qualifying advanced coal project credit, including the
project’s technical feasibility, cost, and applicant’s ability. In the event that there are more qualified (certifiable) applications than
there are available amount of tax credit, DOE will apply additional factors to rank eligible Advanced Coal Projects based on their
ability to advance coal technology beyond its current state.

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If there are more certified applications than available amount of § 48A Phase III credits in Round 2, DOE will rank the certified projects
based on evaluation of the following Program Policy Factors. In ranking certified projects, highest priority will be given to the Primary
Ranking Factor. Secondary and Tertiary Ranking Factors will be taken into account to rank projects that are not clearly differentiated on
the basis of the Primary Ranking Factor, with higher priority given to Secondary Ranking Factors than to Tertiary Ranking Factors.
Primary Ranking Factor:
• Capture and sequestration of more than 70 percent CO2 emissions. Only projects that capture and sequester 70 percent or more of
the plant’s CO2 emissions will be considered for DOE certification. Among the certified projects, highest rankings will be given to
projects with the greatest separation and sequestration percentages of total CO2 emissions.
Secondary Ranking Factors:
• Increased by-product utilization.
• Research partnership with an eligible educational institution as defined in §48A(e)(3)(B)(iii).
Tertiary Ranking Factors:
•
•
•
•
•

Presentation of other environmental, economic, or performance benefits
Higher plant efficiency.
Geographic distribution of potential markets.
The ratio of total nameplate generating capacity (as defined in section 3.02 of Notice 2012–51) to requested tax credit.
Diversity of technology approaches and methods.

G. Supplemental Technical and Financial Guidance for Project Information Memorandum
Technology and Technical Information
It is important that the applicant select a specific advanced coal system for the project. Without that decision, it is difficult to
provide the necessary specific design information needed for DOE to evaluate the project feasibility with respect to performance,
emissions, outputs of major streams as well as capital and operating costs.
The Applicant’s capability to meet the legislated heat rate and/or environmental targets should be supported with design
information, and/or vendor guarantees that are project, site and coal specific.
Project Economics
Applicants should demonstrate the project’s economic feasibility and financial viability by providing a clear statement and explanation
of the economic and financial assumptions made by the applicant, and a financial forecast for the project. The financial forecast should flow
logically from the applicant’s assumptions and be consistent with them. Applicants should include assumptions regarding financial and
economic issues that may not be included in the project costs but have a direct impact on the project. The examples given in the “Site
Control and Ownership” section are relevant here and their impact on the project economics should be discussed here.
Project Development and Financial Plan
The information provided by the applicant in this section should demonstrate that the applicant’s financial plan for developing the
project is feasible and that the applicant will have access to necessary financing. The applicant should explain the source and timing
for obtaining all financing, including the project development costs. It is important that the applicant explain and provide evidence
that it has the capacity to fund the pre-construction project development costs, together with a budget for and description of those
costs. Note that financial information is required for the applicant and for any other funding source.
Project Contract Structure
This section requires that the applicant demonstrate an understanding of the commercial contracting process and show progress
in establishing the framework of contracts and agreements that a project typically requires. Applicants should show that their
intended contract structure is reasonable and that their assumptions relative to price, terms, and conditions are consistent with current
market conditions. Evidence of final agreements, agreements in principle, or summaries of terms and conditions between the
applicant and contract counterparties should be provided, if available.

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Excise Tax on High Cost
Employer-Sponsored
Health Coverage
Notice 2015–16
I. PURPOSE AND OVERVIEW
This notice is intended to initiate and
inform the process of developing regulatory guidance regarding the excise tax on
high cost employer-sponsored health coverage under § 4980I of the Internal Revenue Code (Code). Section 4980I, which
was added to the Code by the Affordable
Care Act,1 applies to taxable years beginning after December 31, 2017. Under this
provision, if the aggregate cost of “applicable employer-sponsored coverage” (referred to in this notice as applicable coverage) provided to an employee exceeds a
statutory dollar limit, which is revised annually, the excess is subject to a 40%
excise tax.
This notice describes potential approaches with regard to a number of issues under § 4980I, which could be incorporated in future proposed regulations,
and invites comments on these potential
approaches. The issues addressed in this
notice primarily relate to (1) the definition
of applicable coverage, (2) the determination of the cost of applicable coverage,
and (3) the application of the annual statutory dollar limit to the cost of applicable
coverage. The Department of the Treasury
(Treasury) and the Internal Revenue Service (IRS) invite comments on the issues
addressed in this notice and on any other
issues under § 4980I.
Treasury and IRS anticipate issuing another notice, before the publication of proposed regulations under § 4980I, describing and inviting comments on potential
approaches to a number of issues not addressed in this notice, including procedural issues relating to the calculation and
assessment of the excise tax. After considering the comments on both notices,
Treasury and IRS anticipate publishing
proposed regulations under § 4980I. The
proposed regulations will provide further

opportunity for comment, including an
opportunity to comment on the issues addressed in the preceding notices.
This notice includes the following sections:
Section I: Purpose and Overview
Section II: Background
Section III: Definition of Applicable
Coverage
Section IV: Determination of Cost of
Applicable Coverage
Section V: Applicable Dollar Limit
Section VI: Possibility of Other Methods of Determining Cost of Applicable
Coverage
Section VII: Request for Comments
Section VIII: Reliance
Section IX: No Inference
Section X: Drafting Information
II. BACKGROUND
A. Section 4980I
Section 4980I was added to the Code
by § 9001 of PPACA, as amended by
§ 10901 of PPACA, and as further
amended by § 1401 of HCERA. Section
4980I is effective for taxable years beginning after December 31, 2017.
Section 4980I(a) imposes a 40% excise
tax on any “excess benefit” provided to an
employee, and § 4980I(b) provides that an
excess benefit is the excess, if any, of the
aggregate cost of the applicable coverage
of the employee for the month over the
applicable dollar limit for the employee
for the month. Section 4980I(d)(3) provides that for this purpose the term “employee” includes “a former employee, surviving spouse, or other primary insured
individual.”
Section 4980I(d)(1)(A) provides that
applicable coverage means “with respect
to any employee, coverage under any
group health plan made available to the
employee by an employer which is excludable from the employee’s gross income
under section 106, or would be so excludable if it were employer-provided coverage
(within the meaning of such section 106).”
Section 4980I(d)(2)(A) provides in relevant part that the cost of applicable cov-

erage is determined under rules “similar to
the rules of section 4980B(f)(4).” Section
4980B(f)(4) defines the term “applicable
premium” for purposes of COBRA2 continuation coverage (referred to in this notice as the COBRA applicable premium).
Section 4980I(d)(2)(A) also provides that,
in determining the cost of applicable coverage for purposes of § 4980I, any amount
that is attributable to the tax imposed under § 4980I is not taken into account for
purposes of determining the cost of applicable coverage and that the amount of the
cost of applicable coverage is to be calculated separately for self-only coverage and
other-than-self-only coverage. Section
4980I(d)(2)(B) and (C) prescribe special
rules for determining the cost of applicable coverage for retirees, health flexible spending arrangements (health
FSAs), Archer medical savings accounts
(Archer MSAs), and health savings accounts (HSAs).
Section 4980I(b)(3)(C) provides for
two annual applicable dollar limits — one
for an employee with self-only coverage
and one for an employee with other-thanself-only coverage. Section 4980I(b)(3)(C)
specifies per-employee baseline dollar
limits for 2018 ($10,200 per employee for
self-only coverage and $27,500 per employee for other-than-self-only coverage)
but further provides for various adjustments to increase the applicable dollar
limits in certain circumstances. Section
4980I(b)(3)(C)(ii) provides that a “health
cost adjustment percentage” will be applied to the baseline dollar limits for 2018
to determine the applicable dollar limits
for that year. Section 4980I(b)(3)(C)(v)
provides that a cost-of-living adjustment
will be applied to determine the applicable
dollar limits for taxable years after 2018.
In addition, § 4980I(b)(3)(C)(iii) provides
that the dollar limits are increased by an age
and gender adjustment, if applicable for an
employer. Section 4980I(b)(3)(C)(iv) provides that an additional amount is added to
the dollar limits for an individual who is a
“qualified retiree” or “who participates in a
plan sponsored by an employer the majority
of whose employees covered by the plan are

1
The “Affordable Care Act” refers to the Patient Protection and Affordable Care Act (enacted March 23, 2010, Pub. L. No. 111–148) (PPACA), as amended by the Health Care and Education
Reconciliation Act of 2010 (enacted March 30, 2010, Pub. L. No. 111–152) (HCERA), and as further amended by the Department of Defense and Full-Year Continuing Appropriations Act,
2011 (enacted April 15, 2011, Pub. L. No. 112–10).
2

COBRA refers to the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), Pub. L. 99 –272 (April 7, 1986).

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engaged in a high-risk profession or employed to repair or install electrical or telecommunication lines.”
In general, § 4980I(b)(3)(B)(i) provides that the applicable dollar limit,
which applies on a monthly basis, is determined based on the type of coverage
(self-only or other-than-self-only) provided to an employee as of the beginning
of a month. Section 4980I(f)(1) provides
that an employee is treated as having selfonly coverage with respect to any applicable coverage of an employer, except
that an employee is treated as having
other-than-self-only coverage if the employee is enrolled in coverage that provides minimum essential coverage
(MEC), as defined in § 5000A(f), to the
employee and at least one other beneficiary, and the benefits provided under that
MEC do not vary based on whether any
individual covered under the coverage is
the employee or another beneficiary. In
addition, any coverage provided under a
multiemployer plan (as defined in
§ 414(f)) is treated as other-than-self-only
coverage. § 4980I(b)(3)(B)(ii).
Section 4980I(c)(1) and (2) specify
that the entity that “shall pay” the excise
tax under § 4980I is (1) the “health insurance issuer” in the case of applicable coverage provided under an insured plan, (2)
“the employer” if the applicable coverage
“consists of coverage under which the
employer makes contributions to” an
HSA or Archer MSA, and (3) “the person that administers the plan” in the
case of any other applicable coverage.
In each case, the employer must calculate the tax and notify the entity liable
for the excise tax (and the IRS) of the
amount of the excise tax “at such time
and in such manner as the Secretary may
prescribe.” § 4980I(c)(4). Section
4980I(f)(10) provides that any excise
tax paid pursuant to § 4980I is not deductible for federal tax purposes.
Section 4980I(g) provides that “[t]he
Secretary may prescribe such regulations
as may be necessary to carry out this
section.”
3

B. COBRA Continuation Coverage
Generally, the cost of applicable coverage under § 4980I is “determined under
rules similar to the rules” under COBRA
for determining the COBRA applicable
premium. § 4980I(d)(2)(A). Under COBRA, the amount that a plan may charge
for continuation coverage generally is
limited to 102% of “the applicable premium.” § 4980B(f)(2)(C). The “applicable premium” means, “with respect to any
period of continuation coverage of qualified beneficiaries, the cost to the plan for
such period of the coverage for similarly
situated beneficiaries with respect to
whom a qualifying event has not occurred
(without regard to whether such cost is
paid by the employer or employee).”
§ 4980B(f)(4)(A). In general, the COBRA
applicable premium must be determined
for a period of 12 months (the determination period), and must be determined before the beginning of the determination
period. § 4980B(f)(4)(C).
Section 4980B(f)(4)(B) specifies two
methods for self-insured plans to determine the COBRA applicable premium:
(1) the actuarial basis method, under
which the cost is equal to a reasonable
estimate of the cost of providing coverage
for similarly situated beneficiaries determined on an actuarial basis, taking into
account “such factors as the Secretary
may prescribe in regulations”; and
(2) the past cost method, which may be
used at the election of the plan administrator except in cases in which there has
been a significant change in coverage under the plan or in employees covered by
the plan.
The current COBRA regulations provide that plans and employers must calculate the COBRA applicable premium in
good faith compliance with a reasonable
interpretation of the statutory requirements in § 4980B. Treas. Reg.
§ 54.4980B–1, Q&A–2.
C. Form W–2 Reporting of Applicable
Coverage
Separately from § 4980I, the Affordable Care Act added § 6051(a)(14) to the

Code, which requires employers to report
on Form W–2, Wage and Tax Statement,
the aggregate cost (determined under rules
similar to the rules of § 4980B(f)(4)) of
applicable coverage (as defined in
§ 4980I(d)(1)).3 As currently implemented, this amount is reported in Box 12
of the Form W–2, Wage and Tax Statement, using Code DD. See General Instructions for Forms W–2 and W–3.
Notice 2012–9, 2012– 4 I.R.B. 315,
provides interim guidance applicable to
the 2012 Forms W–2 and will continue to
be applicable until further guidance is issued.4 Notice 2012–9 provides guidance
on which employers are subject to the
§ 6051(a)(14) reporting requirement,
methods for reporting, and methods for
determining the cost of coverage. Notice
2012–9 also provides transition relief for
certain employers (for example, those filing fewer than 250 Forms W–2 in the
prior year) and with respect to certain
types of employer-sponsored coverage
(for example, health reimbursement arrangements (HRAs)).
The interim guidance provided under
Notice 2012–9 is intended solely for purposes of § 6051(a)(14). Treasury and IRS
do not anticipate that the same guidance
or rules will apply for purposes of
§ 4980I. However, Treasury and IRS anticipate that to the extent guidance under
§ 4980I provides improved methods for
determining the cost of applicable coverage, consistent rules may be issued for
purposes of § 6051(a)(14).
III. DEFINITION OF APPLICABLE
COVERAGE
A. In General
Section 4980I(d)(1)(A) provides that
applicable coverage means “with respect
to any employee, coverage under any
group health plan made available to the
employee by an employer which is excludable from the employee’s gross income under section 106, or would be so
excludable if it were employer-provided
coverage (within the meaning of such section 106).”

Section 6051(a)(14) was added to the Code by § 9002 of PPACA.

4

Notice 2012–9 restated and amended the interim guidance on informational reporting to employees of the cost of their employer-sponsored group health plan coverage that was initially
provided in Notice 2011–28, 2011–16 I.R.B. 656. Notice 2010 – 69, 2010 – 44 I.R.B. 576, provided that reporting under § 6051(a)(14) was not mandatory for 2011 Forms W–2.

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March 9, 2015

Section 4980I(f)(4) provides that the
term “group health plan” for purposes of
§ 4980I has the meaning given such term
by § 5000(b)(1). Under § 5000(b)(1),
“[t]he term ‘group health plan’ means a
plan (including a self-insured plan) of, or
contributed to by, an employer (including
a self-employed person) or employee organization to provide health care (directly
or otherwise) to the employeeds, former
employees, the employer, others associated or formerly associated with the employer in a business relationship, or their
families.”
Section 4980I(d)(1)(C) provides that
coverage that meets the basic definition of
applicable coverage is applicable coverage “without regard to whether the employer or employee pays for the coverage.” In addition, coverage that otherwise
meets the definition of applicable coverage is applicable coverage without regard
to whether the employer provides the coverage (and thus the coverage is excludable
from the employee’s gross income) or the
employee pays for the coverage with
after-tax dollars. See § 4980I(d)(1)(A);
see also Technical Explanation of the
Revenue Provisions of the “Reconciliation Act of 2010,” as Amended, In Combination with the “Patient Protection and
Affordable Care Act”, prepared by the
Joint Committee on Taxation (March 21,
2010, JCX–18 –10) (JCT Report). Also,
the general definition of applicable coverage includes both insured and self-insured
coverage. See § 4980I(f)(4), § 5000(b)(1);
see also JCT Report, at 62.
Section 4980I(d)(1)(D) provides that
applicable coverage includes coverage under a group health plan for self-employed
individuals, within the meaning of
§ 401(c), “if a deduction is allowable under § 162(l) with respect to all or any
portion of the cost of coverage.5
Section 4980I(d)(3) provides that “the
term employee includes any former employee, surviving spouse, or other primary
insured individual.” Accordingly, applicable coverage includes retiree coverage to

the extent it otherwise constitutes applicable coverage.
B. Types of Coverage Included in
Applicable Coverage
While § 4980I(d)(1)(A) provides a
general definition of applicable coverage,
other subsections of § 4980I explicitly
address the following types of coverage
and indicate that they constitute applicable coverage:
(1) Health FSAs (§ 4980I(d)(2)(B));
(2) Archer MSAs (but see section III.D
of this notice for certain contributions
by individuals that are not included)
(§§ 4980I(c)(2)(B), 4980I(d)(2)(C));
(3) HSAs (but see section III.D of this
notice for certain contributions by individuals that are not included) (§§ 4980I(c)(2)(B),
4980I(d)(2)(C));
(4) Governmental plans, defined as
“coverage under any group health plan
established and maintained primarily for
its civilian employees by the Government
of the United States, by the government of
any State or political subdivision thereof,
or by any agency or instrumentality of any
such government” (but see section III.C of
this notice for the exclusion of military
coverage) (§ 4980I(d)(1)(E));
(5) Coverage for on-site medical clinics
(but see section III.E of this notice for a
potential approach that would exclude onsite medical clinics that provide only de
minimis medical care) (§ 4980I(d)(1)(B)(i));
(6) Retiree coverage (§§ 4980I(d)(3),
4980I(b)(3)(C)(iv));
(7) Multiemployer plans (as defined
in § 414(f)) (§§ 4980I(b)(3)(B)(ii),
4980I(c)(4)(B)); and
(8) Coverage described in § 9832(c)(3)
(which includes coverage only for a specified disease or illness and hospital indemnity or other fixed indemnity insurance), if
the payment for the coverage or insurance
is excluded from gross income or a deduction under § 162(l) is allowed with respect
to it (§ 4980I(d)(1)(B)(iii)).
Other types of coverage, such as executive physical programs and HRAs, meet

the general definition of applicable coverage under § 4980I(d)(1)(A) and are not
specifically excluded by another provision
of § 4980I. Future guidance is expected to
provide that executive physical programs
and HRAs are applicable coverage. See
also JCT Report, at 62.
C. Types of Coverage Excluded from
Applicable Coverage
Section 4980I(d)(1) also lists certain
types of coverage that are excluded from
applicable coverage. Under § 4980I(d)(1)(B),
the following are excluded from applicable
coverage:
(1) Coverage described in § 9832(c)(1)
(other than sub-paragraph (G) thereof),
whether through insurance or otherwise.6 Section 9832(c)(1) (other than § 9832(c)(1)(G))
includes:
(a) coverage only for accident, or disability income insurance, or any combination thereof (§ 9832(c)(1)(A));
(b) coverage issued as a supplement to
liability insurance (§ 9832(c)(1)(B));
(c) liability insurance, including general liability insurance and automobile liability insurance (§ 9832(c)(1)(C));
(d) workers’ compensation or similar
insurance (§ 9832(c)(1)(D));
(e) automobile medical payment insurance (§ 9832(c)(1)(E));
(f) credit-only insurance (§ 9832(c)(1)(F));
and
(g) other insurance coverage, as specified in regulations, similar to the coverage
listed in § 9832(c)(1) and under which
benefits for medical care are secondary or
incidental to other insurance benefits
(§ 9832(c)(1)(H));7
(2) Coverage, whether through insurance or otherwise, for long-term care;
(3) Any coverage under a separate policy, certificate, or contract of insurance
which provides benefits substantially all
of which are for treatment of the mouth
(including any organ structure within the
mouth) or for treatment of the eye (but see
section III.F of this notice for a potential
approach to exclude all limited scope den-

5
In general, § 162(l) allows a self-employed individual a deduction for amounts paid for medical insurance for the individual and his or her family. The deduction is limited by the individual’s
income from the trade or business and is not allowed if the individual is eligible to participate in any subsidized health plan maintained by an employer of the taxpayer or of certain other
individuals related to the taxpayer. § 162(l)(2)(A), (B).
6
Section 9832 describes certain excepted benefits, which are generally not subject to the provisions of chapter 100 of the Code pursuant to section 9831. See also Treas. Reg. § 54.9831–1.
Chapter 100 was added to the Code by the Health Insurance Portability and Accountability Act of 1996, and imposes certain portability and nondiscrimination requirements with respect
to group health plan coverage. Chapter 100 was later augmented by other consumer protection laws and by the Affordable Care Act.
7

No excepted benefits have been added by regulation under § 9832(c)(1)(H).

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tal and vision benefits that qualify as excepted benefits (insured and self-insured)); and
(4) Coverage described in § 9832(c)(3)
(which includes coverage only for a specified disease or illness and hospital indemnity or other fixed indemnity insurance), if
the payment for the coverage or insurance
is not excluded from gross income or a
deduction under § 162(l) is not allowed
with respect to it.
In addition, § 4980I(d)(1)(E) implies
that coverage provided under a plan maintained primarily for members of the military or for members of the military and
their families by the Government of the
United States, the government of any
State or political subdivision thereof, or
any agency or instrumentality of any such
government is not applicable coverage.
See § 4980I(d)(1)(E) (providing that governmental plans are included in applicable
coverage and defining governmental plans
as “coverage under any group health plan
established and maintained primarily for
its civilian employees by the Government
of the United States, by the government of
any State or political subdivision thereof,
or by any agency or instrumentality of any
such government.”) (Emphasis added.)
D. HSAs/Archer MSAs
Treasury and IRS anticipate that future
proposed regulations will provide that (1)
employer contributions to HSAs and Archer MSAs, including salary reduction
contributions to HSAs, are included in
applicable coverage, and (2) employee
after-tax contributions to HSAs and Archer MSAs are excluded from applicable
coverage.
Section 4980I(d)(2)(C) includes a special rule for determining the cost of coverage under HSAs and Archer MSAs.
This rule provides that “in the case of
applicable employer-sponsored coverage
consisting of coverage under an arrangement under which the employer makes
contributions described in subsection (b)
or (d) of section 106, the cost of the coverage shall be equal to the amount of the
employer contributions under the arrangement.” Employer contributions to an HSA
or Archer MSA are excludable under subsection (d) or (b), respectively, of § 106,
and therefore are applicable coverage.
This includes employee pre-tax salary re-

Bulletin No. 2015–10

duction contributions to an HSA, which
are treated as employer contributions for
purposes of § 106 and are excludable under § 106(d).
In contrast, employee after-tax contributions to an HSA or Archer MSA are not
excludable under § 106 but rather are deductible by an employee under § 223
(HSAs) or § 220 (Archer MSAs). Therefore, employee after-tax contributions to
HSAs and Archer MSAs are not employer
contributions under §§ 106(b) or (d). Accordingly, employee after-tax contributions to HSAs and Archer MSAs are not
applicable coverage.
E. On-site Medical Clinics
Section 4980I(d)(1)(B)(i) excludes
from the definition of applicable coverage
each of the excepted benefits listed in
§
9832(c)(1),
other
than
the
§ 9832(c)(1)(G) exception for on-site
medical clinics. Accordingly, coverage
provided through an on-site medical clinic
generally is applicable coverage. Treasury
and IRS, however, anticipate that the
forthcoming proposed regulations will
provide that applicable coverage does not
include on-site medical clinics that offer
only de minimis medical care to employees. This exception would be consistent
with the JCT Report, and it also avoids the
burden of calculating the incremental additional cost of coverage that would be
provided under such an arrangement,
which most employees likely would not
consider part of their health coverage. See
JCT Report, at 62 (“Employer-sponsored
health insurance coverage includes . . .
on-site medical clinics that offer more
than a de minimis amount of medical care
to employees . . . .”).
Treasury and IRS note that COBRA
regulations provide that “[t]he provision
of health care at a facility that is located
on the premises of an employer or employee organization does not constitute a
group health plan if—(1) [t]he health care
consist primarily of first aid that is provided during the employer’ working hours
for treatment of a health condition, illness,
or injury that occurs during those working
hours; (2) [t]he health care is available
only to current employees; and (3) [e]mployees are not charged for the use of the
facility.” Treas. Reg. § 54.4980B–2,
Q&A–1(d).

735

In addition, Treasury and IRS seek
comment on the treatment of clinics that
meet the criteria described in the COBRA
regulations and provide certain services in
addition to (or in lieu of) first aid, for
example: (1) immunizations; (2) injections of antigens (for example, for allergy
injections) provided by employees; (3)
provision of a variety of aspirin and other
nonprescription pain relievers; and (4)
treatment of injuries caused by accidents
at work (beyond first aid).
Comments are requested on how Treasury and IRS should treat medical care in
the case of on-site medical clinics, including whether the standard should be based
on the nature and scope of the benefits or
denominated as a specific dollar limit on
the cost of services provided, or some
combination of these two standards. In
addition, comments are requested on how
to determine the cost of coverage provided by an on-site medical clinic that is
applicable coverage.
F. Limited Scope Dental and Vision
Benefits
Section 4980I(d)(1)(B)(ii) excludes
from applicable coverage “any coverage
under a separate policy, certificate, or contract of insurance which provides benefits
substantially all of which are for treatment
of the mouth (including any organ or
structure within the mouth) or for treatment of the eye.” Because this section
refers only to dental and vision benefits
that are provided under a “separate policy,
certificate or contract of insurance,” stakeholders have asked whether this means
that stand-alone dental and vision benefits
will be treated differently for purposes of
§ 4980I depending on whether they are
insured or self-insured.
As previously noted, generally whether
coverage is insured or self-insured is not
relevant for purposes of § 4980I, including for purposes of identifying whether
any particular coverage is applicable coverage. §§ 4980I(d)(1)(A), (f)(4); JCT Report, at 62. Treasury and IRS, the Department of Labor and the Department of
Health and Human Services (the Departments) recently amended the excepted
benefit regulations under § 9831 on limited scope dental and vision benefits “to
achieve greater consistency between in-

March 9, 2015

sured and self-insured coverage.” 79 FR
59130, 59132 (Oct. 1, 2014).
Treasury and IRS are considering
whether to exercise their regulatory authority under § 4980I(g) to propose an
approach under which self-insured limited
scope dental and vision coverage that
qualifies as an excepted benefit pursuant
to the recently issued regulations under
§ 9831 would be excluded from applicable coverage for purposes of § 4980I. See
Treas. Reg. § 54.9831–1(c)(3). Comments
are requested on any reasons why Treasury and IRS should not implement this
approach.
G. Employee Assistance Programs
(EAPs)
Under recently issued regulations, the
Departments added employee assistance
programs (EAPs) that meet certain criteria
to the list of excepted benefits to ensure
that employers are able to continue to
offer certain EAPs as benefits that are
supplemental to other coverage. Treas.
Reg. § 54.9831–1(c)(3)(vi) (79 FR 59130,
59133).]
Treasury and IRS are considering
whether to exercise authority under
§ 4980I(g) to propose that EAPs that qualify as an excepted benefit pursuant to the
recently issued regulations under § 9831
would be excluded from applicable coverage for purposes of § 4980I. Comments
are requested on any reasons why Treasury and IRS should not implement this
approach.
IV. DETERMINATION OF COST
OF APPLICABLE COVERAGE

specific calculation rules that apply to certain types of arrangements.
1. Determination of Applicable
Premium under COBRA
Under § 4980B(f)(4), the COBRA applicable premium generally is based on
the average cost of providing coverage for
those covered under the plan who are similarly situated, instead of the cost of providing coverage based on the characteristics of each individual.
As noted earlier, Section 4980B(f)(4)(A)
defines COBRA applicable premium to
mean, “with respect to any period of continuation coverage of qualified beneficiaries, the cost to the plan for such period of
the coverage for similarly situated beneficiaries with respect to whom a qualifying
event has not occurred (without regard to
whether such cost is paid by the employer
or employee).” Section 4980B(f)(4)(B)
prescribes two methods for self-insured
plans to determine the COBRA applicable
premium: (i) the actuarial basis method;
and (ii) the past cost method. Section
4980B(f)(4)(C) provides that the COBRA
applicable premium must be determined
for a 12-month determination period, and
must be determined before the beginning
of such period.
The COBRA regulations provide that,
with respect to the determination of the
COBRA applicable premium, plans and
employers must operate in good faith
compliance with a reasonable interpretation of the statutory requirements in
§ 4980B. Treas. Reg. § 54.4980B–1,
Q&A–2.
2. Specific Rules under § 4980I

A. In General
Section 4980I imposes a 40% excise
tax on the excess, if any, of the aggregate
cost of the applicable coverage of an employee for a month over the applicable
dollar limit for the month. Section
4980I(d)(2)(A) provides that the cost of
applicable coverage generally is determined under rules similar to the rules of
§ 4980B(f)(4), which apply for purposes
of determining the COBRA applicable
premium. Section 4980I also prescribes
8

Section 4980I also includes additional
calculation rules for determining the cost
of applicable coverage.
(1) § 4980I Tax Not Included in Cost.
Section 4980I(d)(2)(A) provides that the
cost of applicable coverage under § 4980I
does not take into account “any portion of
the cost of such coverage which is attributable to the tax imposed under this section.”
(2) Separate Costs for Self-Only and
Other-than-Self-Only Coverage. Section

4980I(d)(2)(A) provides that the cost of
applicable coverage must be calculated
separately for self-only coverage and
other-than-self-only coverage. Section
4980I(b)(3)(B)(iii) provides that any coverage under a multiemployer plan (as defined in § 414(f)) is treated as other-thanself-only coverage for purposes of
§ 4980I.
(3) Retirees. Section 4980I(d)(2)(A)
provides that, in the case of applicable
coverage provided to retired employees,
the plan may elect to treat a retired employee who has not attained the age of 65
and a retired employee who has attained
the age of 65 as similarly situated beneficiaries.8
(4) Health FSAs. Section 4980I(d)(2)(B)
provides for health FSAs that the cost of
applicable coverage is equal to the sum of
salary reduction contributions plus the
amount determined under the general calculation rule with respect to any reimbursement under the arrangement in excess of the salary reduction contributions.
Thus, the cost of applicable coverage under a health FSA includes employer flex
contributions used for the health FSA.
(5) HSAs and Archer MSAs. Section
4980I(d)(2)(C) provides for HSAs and
Archer MSAs that the cost of applicable
coverage “shall be equal to the amount of
employer contributions under the arrangement.” For this purpose, employer contributions include salary reduction contributions.
(6) Monthly Costs. Section 4980I(d)(2)(D)
provides that for applicable coverage for
which the cost is determined “on other than a
monthly basis, the cost shall be allocated to
months in a taxable period on such basis as the
Secretary may prescribe.”
B. Aggregate Cost of Applicable
Coverage Based on Applicable
Coverage in Which Employee is
Enrolled
Section 4980I(a) provides that if “an
employee is covered under any applicable
employer-sponsored coverage of an employer” during a taxable period and “there
is an excess benefit with respect to the
coverage,” an excise tax applies. (Emphasis added.) Section 4980I(b) provides that
the “excess benefit” is the excess of “(A)

For a description of the additional amount added to the § 4980I dollar limit for “qualified retirees,” see section V.C of this notice.

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the aggregate cost of the applicable
employer-sponsored coverage of the employee for the month, over (B) an amount
equal to 1/12 of the annual limitation” for
the employee for the applicable calendar
year. (Emphasis added.)
Although other subsections of the statute refer to the coverage “made available”
to the employee, §§ 4980I(a) and (b) explicitly provide that the applicable coverage that is compared to the dollar limit for
purposes of determining the excise tax is
the applicable coverage in which the employee is enrolled, rather than coverage
offered to the employee but in which the
employee does not enroll (the cost of
which could be above or below the dollar
limit). See also JCT Report, at 65.
C. Potential Approaches for
Determining Cost of Applicable
Coverage
As noted earlier, § 4980I(d)(2)(A) provides that the cost of applicable coverage
is determined “under rules similar to the
rules of section 4980B(f)(4)” regarding
the determination of the COBRA applicable premium.
A number of issues arise in computing
the COBRA applicable premium on
which specific guidance has not been provided, including how to determine which
nonCOBRA beneficiaries are similarly
situated, the specific methods self-insured
plans may use to determine the COBRA
applicable premium, and how to determine the COBRA applicable premium for
HRAs. This section IV.C describes potential approaches with respect to each of
these issues for purposes of § 4980I.
Treasury and IRS also continue to consider whether the potential approaches described below should apply for purposes
of determining the COBRA applicable
premium.
1. Similarly Situated Individuals
The COBRA applicable premium for a
qualified beneficiary entitled to COBRA
continuation coverage is based on the cost
of coverage for similarly situated nonCOBRA beneficiaries. § 4980B(f)(4)(A). The
COBRA regulations define similarly situated nonCOBRA beneficiaries as the cov9

ered employees, spouses of covered employees, or dependent children of covered
employees receiving coverage under the
group health plan maintained by the employer or employee organization who are
receiving that coverage for a reason other
than COBRA, and who are most similarly
situated to the situation of the qualified
beneficiary immediately before the qualifying event. Treas. Reg. § 54.4980B–3,
Q&A–3.
Treasury and IRS anticipate that a
somewhat similar standard will apply for
§ 4980I and that, for any specific type of
applicable coverage, the cost of that applicable coverage for an employee will be
based on the average cost of that type of
applicable coverage for that employee and
all similarly situated employees. Under
the potential approach that Treasury and
IRS are considering, each group of similarly situated employees would be determined by starting with all employees covered by a particular benefit package
provided by the employer, then subdividing that group based on mandatory disaggregation rules, and allowing further subdivision of the group based on permissive
disaggregation rules.
Aggregation by Benefit Package. Under the potential approach that Treasury
and IRS are considering for purposes of
determining the groups of similarly situated employees, the initial groups of similarly situated employees would be determined by aggregating all employees (as
defined in § 4980I(d)(3)) covered by a
particular benefit package provided by the
employer.9 The employees enrolled in
each different benefit package would be
grouped separately. Benefit packages
would be considered different based upon
differences in health plan coverage; there
may be more than one benefit package
provided under a group health plan. Employees would be grouped by the benefit
packages in which they are enrolled,
rather than the benefit packages they are
offered. Thus, for example, if employees
are provided a choice between a standard
and a high option (such as an option with
lower deductibles and copays), employees
covered under the high option would be
grouped separately from those covered
under the standard option. The result

would be the same if the choice instead
was, for example, between an HMO option and a PPO option, between several
different HMO options, or between several different HMO and PPO options.
Mandatory Disaggregation (Self-Only
Coverage and Other-Than-Self-Only Coverage). After aggregating all employees
covered by a particular benefit package,
under this potential approach, the employer would then be required to disaggregate the employees within the group
covered by the benefit package based on
whether an employee had enrolled in selfonly coverage or other-than-self-only coverage. For example, in a benefit package
allowing employees to choose between
self-only and family coverage, employees
receiving self-only coverage would be
grouped separately from those receiving
family coverage. This potential approach
is consistent with § 4980I(d)(2)(A), which
provides that the cost of applicable coverage “shall be calculated separately for
self-only coverage and other coverage.”
Permissive Aggregation within OtherThan-Self-Only Coverage. However,
within a group of employees who are receiving other-than-self-only coverage,
§ 4980I(d)(2)(A) does not require that the
cost of applicable coverage be determined
separately based on the number of individuals who are receiving coverage in addition to the employee (for example, employee plus one, employee plus two, or
family coverage). As a result, Treasury
and IRS are considering an approach under which an employer would not be required to determine the cost of applicable
coverage for employees receiving otherthan-self-only coverage based on the
number of individuals covered in addition
to the employee (even if the actual cost of
such coverage varied on this basis). Under this potential approach, an employer
could treat all employees who are enrolled in the same benefit package and
who receive coverage for one or more
individuals in addition to the employee
as similarly situated for purposes of determining the cost of applicable coverage for that group.
Permissive Disaggregation. For the
purposes of COBRA, Treasury and IRS
are considering permitting (but not requir-

All employers treated as a single employer under § 414(b), (c), (m), or (o) are treated as a single employer for purposes of § 4980I. § 4980I(f)(9).

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737

March 9, 2015

ing) further disaggregation based on distinctions that have traditionally been made
in the group insurance market. Because
the cost of applicable coverage under
§ 4980I is generally determined under
rules similar to the rules applicable to
COBRA, Treasury and IRS are also considering permissive disaggregation for
purposes of § 4980I. In particular, Treasury and IRS are considering whether to
provide rules for permissive disaggregation that would allow, but not require, an
employer to subdivide further the group of
employees that would be treated as similarly situated. Specifically, Treasury and
IRS are considering whether disaggregation should be permitted based on (a) a
broad standard (such as limiting permissive disaggregation to bona fide
employment-related criteria, including,
for example, nature of compensation,
specified job categories, collective bargaining status, etc.) while prohibiting the
use of any criterion related to an individual’s health), or (b) a more specific standard (such as a specified list of limited
specific categories for which permissive
disaggregation is allowed). A more specific standard, for example, could permit
groups of similarly situated employees enrolled in a single benefit package to be
disaggregated only into current and former employees and/or to be disaggregated
based on bona fide geographic distinctions, such as an employee’s residence in
or a business’s location in different states
or metropolitan areas and/or, for an employee receiving other-than-self-only coverage, based on the number of individuals
covered in addition to the employee (that
is, different rating units).
Treasury and IRS invite comments on
the potential approach described in this
section with respect to determining groups
of similarly situated employees, including
areas in which additional guidance would
be beneficial. With respect to the potential
approach to mandatory aggregation of
employees who are enrolled in the same
benefit package, comments are requested
on the extent to which benefit packages
must be identical to be considered the
same for this purpose and, if differences
are permitted, the nature and extent of
those permitted differences. With respect
to the two potential approaches for permissive disaggregation set out in the pre-

March 9, 2015

vious paragraph, comments are requested
on which approach is preferable. If the
second approach (under which specific
criteria for permissive disaggregation are
enumerated) is preferable, comments are
requested on what specific criteria should
be permitted. Comments are also requested
on whether additional guidance would be
beneficial under § 4980I(d)(2)(A), which
states that, for applicable coverage provided to employees, “the plan may elect to
treat a retired employee who has not attained the age of 65 and a retired employee who has attained the age of 65 as
similarly situated beneficiaries.”
When developing comments on these
approaches, stakeholders are requested to
be mindful of § 4980I(d)(2)(A), which
provides that the cost of applicable coverage under § 4980I is generally determined
under rules similar to the rules applicable
to COBRA. Accordingly, future guidance
on determining the COBRA applicable
premium is likely to attempt to harmonize
the COBRA rules with the rules under
§ 4980I to the extent practicable. With
respect to COBRA, allowing some employers to make distinctions that they
have not previously made when offering
coverage to participants and beneficiaries
could result in a standard that is susceptible to abuse. A list of exclusive criteria is
likely less susceptible to such abuse.
However, Treasury and IRS are also concerned that, for purposes of COBRA, prohibiting any further disaggregation after
mandatory disaggregation would be too
restrictive because it would not allow distinctions that have traditionally been made
in the group market. Although the rules
for determining the cost of applicable coverage under § 4980I generally can be expected to be similar to the rules for determining the COBRA applicable premium,
some differences may be appropriate.
Treasury and IRS invite comments on
these issues.
2. Self-Insured Methods
Section 4980B(f)(4)(B) prescribes two
methods for self-insured plans to compute
the COBRA applicable premium — the
actuarial basis method and the past cost
method. A plan must use the actuarial
basis method unless the plan administrator

738

elects to use the past cost method and the
plan is eligible to use that method.
Actuarial Basis Method. As set forth in
§ 4980B(f)(4)(B)(i), the actuarial basis
method provides that, to the extent that a
plan is a self-insured plan, the COBRA
applicable premium is equal to a reasonable estimate of the cost of providing coverage for similarly situated beneficiaries
that (i) is determined on an actuarial basis,
and (ii) takes into account such factors as
the Secretary may prescribe in regulations. Treasury and IRS have not issued
regulations prescribing factors to take into
account.
Past Cost Method. As set forth in
§ 4980B(f)(4)(B)(ii), the past cost method
provides that the COBRA applicable premium is equal to “(I) the cost to the plan
for similarly situated beneficiaries for the
same period occurring during the preceding determination period. . . adjusted by
(II) the percentage increase or decrease in
the implicit price deflator of the gross
national product (calculated by the Department of Commerce and published in
the Survey of Current Business) for the
12-month period ending on the last day of
the sixth month of such preceding determination period.” Section 4980B(f)(4)(iii)
provides that a plan administrator may not
elect to use the past cost method “in any
case in which there is any significant difference between the determination period
and the preceding determination period, in
coverage under, or in employees covered
by, the plan. . . .” Section 4980B(f)(4)(C)
provides that the determination of any
COBRA applicable premium must be made
for a period of 12 months and must be made
before the beginning of that period. See
section IV.D of this notice for a discussion
of a possible approach using actual costs
incurred during the plan year to calculate the
cost of coverage under the past cost method
for purposes of § 4980I (but not COBRA).
Treasury and IRS anticipate that, in
general, these two methods will apply for
purposes of determining the cost of applicable coverage for self-insured plans for
purposes of § 4980I, and seek comment
on this approach. See § 4980I(d)(2)(A).
a. Changing Between Methods
In the COBRA context, Treasury and
IRS are concerned about the possibility of

Bulletin No. 2015–10

abuse if a plan switches between the actuarial basis method and the past cost
method frequently. Consequently, Treasury and IRS are considering proposing a
rule under § 4980B that generally would
require a plan to use the valuation
method that it chooses for a period of at
least five years. The only exception
would be based on the prohibition under
§ 4980B(f)(4)(B)(iii) on using the past
cost method if there is a significant difference between periods in coverage under, or in employees covered by, the
plan. In that case, the plan might be
required to use the actuarial basis
method for the two years following the
significant change.
Treasury and IRS are considering
whether to adopt a similar standard for
purposes of § 4980I. Comments are requested on this possibility, on whether
there should be concerns about allowing
an employer to use the past cost method
only for years in which claims are unusually low, and on whether allowing the use
of different methods from year to year
would cause administrative concerns or
raise other issues.
b. Actuarial Basis Method
Under § 4980B(f)(4)(B)(ii)(I), a selfinsured plan making an actuarial estimate
of the cost of providing coverage must
take into account factors prescribed in
regulations. For purposes of § 4980I,
Treasury and IRS are considering whether
to propose a broad standard under which
the cost of applicable coverage for a group
of similarly situated individuals would be
equal to a reasonable estimate of the cost
of providing coverage under the plan for
individuals in that group for the determination period, using reasonable actuarial
principles and practices. Under this standard, an estimate of cost would be an
estimate of the actual cost the plan is
expected to incur for a determination period, not the minimum (or maximum) exposure that the plan could have for that
period.
Treasury and IRS invite comments on
all aspects of this potential approach, including whether proposed regulations
should require some accreditation of individuals making actuarial estimates,
whether it would be preferable to specify

Bulletin No. 2015–10

a list of factors that must be satisfied to
make an actuarial determination of the
cost of applicable coverage, and whether a
similar standard should apply for purposes
of determining the COBRA applicable
premium.
c. Past Cost Method
i. Measurement Period under Past
Cost Method
Under § 4980B(f)(4)(B)(ii), a plan
electing to use the past cost method determines the COBRA applicable premium
based on the cost to the plan for similarly
situated beneficiaries for the same period
occurring during the preceding 12-month
determination period, as adjusted under
§ 4980B(f)(4)(B)(ii)(II). For COBRA purposes, Treasury and IRS are considering
whether to issue guidance providing that
plans choosing the past cost method may
use as the 12-month measurement period
for a current determination period any 12month period ending not more than 13
months before the beginning of the current determination period. Thus, for example, under this potential approach, a
plan could use the determination period
ending one year before the current determination period as the measurement period for computing costs for the current
determination period, or it could use a
measurement period beginning 18 months
before and ending six months before the
beginning of the current determination period. The measurement period would have
to be applied consistently. For example, if
a plan used a 12-month measurement period ending three months before the beginning of the current determination period, the plan would be required to
consistently use the same measurement
period for future years, absent bona fide
business reasons for a change.
The
rule
provided
under
§ 4980B(f)(4)(B)(ii)(II), which applies an
adjustment factor to the costs determined
over the 12-month measurement period
under the past cost method, would continue to apply under this potential approach.
Treasury and IRS are considering
whether to adopt a similar standard for
purposes of § 4980I. Comments are requested on this approach, including any
administrative issues that may need to be
addressed, as well as whether this ap-

739

proach should also be made applicable for
§ 4980I purposes.
ii. Costs Taken into Account under
Past Cost Method
Treasury and IRS anticipate that proposed regulations would describe the
costs that must be taken into account in
computing costs under the past cost
method. The costs could include (1)
claims, (2) premiums for stop-loss or reinsurance policies, (3) administrative expenses, and (4) reasonable overhead expenses (such as salary, rent, supplies, and
utilities) of the employer, with those reasonable overhead expenses being ratably
allocated to the cost of administering the
employer’s health plans.
With respect to the cost of claims,
those costs could include either claims
incurred during the measurement period
(whether paid or unpaid) or claims submitted during the measurement period (regardless of when incurred). Treasury and
IRS invite comments on which of these
two approaches is preferable, the type of
data employers and insurers traditionally
track (that is, data based on claims incurred or on claims submitted), and, if
relevant, the maximum length of time after the end of the plan year that should be
permitted to account for claims submitted
after, but incurred during, the plan year
(often referred to as a run-out period).
With respect to reasonable overhead
expenses, Treasury and IRS invite comments as to whether additional guidance
on what constitutes reasonable overhead
expenses would be beneficial, including
(1) whether a presumption should be adopted that, for self-insured plans with a
third party administrator, reasonable overhead expenses are reflected in the third
party administrator fee, and (2) whether a
safe harbor should be adopted that would
allow a self-administered, self-insured
plan to assume that the amount of reasonable overhead expenses is equal to a defined percentage of claims.
Treasury and IRS anticipate that the
costs taken into account under the past
cost method under the proposed regulations would not take into account reserves
for potential future costs, claims incurred
to the extent subject to reimbursement under a stop-loss or reinsurance policy, or
any portion of the cost of coverage which

March 9, 2015

is attributable to the excise tax.10 Treasury
and IRS invite comments on all aspects of
this potential approach, including whether
a similar standard should apply for purposes of determination of the COBRA
applicable premium.
3. HRAs
Treasury and IRS anticipate that future
guidance will provide that an HRA is applicable coverage under § 4980I. Section
4980I does not include special rules for
determining the cost of coverage under an
HRA. Therefore, the cost of coverage under an HRA is determined under the general § 4980I valuation rules.
Notice 2002– 45, 2002–28 I.R.B. 93,
contains guidance on a number of issues
relating to HRAs, provides that HRAs are
subject to COBRA, and states that the
COBRA applicable premium under an
HRA may not be based on a qualified
beneficiary’s reimbursement amounts
available from the HRA. Treasury and
IRS have not provided further guidance
on the calculation of the COBRA applicable premium for an HRA.
Treasury and IRS are considering various methods that future guidance might
permit for use in determining the cost of
applicable coverage under an HRA, including determining the cost of applicable
coverage under an HRA based on the
amounts made newly available to a participant each year. This potential approach
would not take into account carry-over
amounts or amounts made newly available before 2018 (except potentially
amounts made available for non-calendar
plan years beginning in 2017 and ending
in 2018). This approach might provide
employers with greater certainty as to the
cost of applicable coverage under an HRA
from year to year.
In certain circumstances, however,
such an approach could overvalue an
HRA because the total contributions
might not be spent in the current period
(for example, because the employer provides large HRA contributions that go unused in a given year). Accordingly, Treasury and IRS are also considering a rule,
either instead of or in addition to the po-

tential approach described above, that
would permit employers to determine the
cost of coverage by adding together all
claims and administrative expenses attributable to HRAs for a particular period
(separately for each level of coverage if
the employer allocation differs by employee election, such as allocating $1,000
to the accounts of employees electing selfonly coverage and allocating $2,000 to the
accounts of employees electing family
coverage) and dividing that sum by the
number of employees covered for that period (at that level of coverage). Under this
potential approach, reasonable overhead
expenses would be determined in a manner similar to that described in section
IV.C.2.c.ii of this notice (Costs Taken into
Account under Past Cost Method). Treasury and IRS are also considering whether
to permit or require employers to use the
actuarial basis method to determine the
cost of coverage under an HRA.
Some stakeholders have suggested that
the cost of applicable coverage should not
include an HRA that can be used only to
fund the employee contribution toward
coverage. This suggestion is based on the
position that the other coverage purchased
with HRA proceeds would be applicable
coverage and that including the value of
both the HRA and the other coverage
would constitute double counting. Comments are requested on the frequency with
which HRAs allow reimbursement only
for employee contributions toward coverage, on how the cost of an HRA should be
determined if the HRA can be used by
employees to fund employee contributions toward coverage and can be used for
other medical expenses, and, specifically
in that circumstance, on whether the standard should depend on how employees
choose to use the HRA (that is, for employee contributions toward coverage or
for other expenses), and on the administrability of such an approach.
Similarly, some stakeholders have suggested that the cost of applicable coverage
should not include an HRA that can be
used to cover a range of benefits, some of
which would not be applicable coverage.
Comments are requested on the frequency
with which HRAs allow reimbursement

only for types of coverage that are not
applicable coverage, on how the cost of an
HRA should be determined if employees
can use it both for coverage that is and for
coverage that is not applicable coverage,
and, in that circumstance, on whether the
standard should depend on how employees choose to use the HRA (that is, for
applicable coverage or for a benefit that is
not applicable coverage), and on the administrability of such an approach.
Treasury and IRS are concerned that
making available multiple methods for determining the cost of applicable coverage
under an HRA could increase administrative complexity materially. Providing
only one method to determine the cost of
applicable coverage would minimize
these concerns. Treasury and IRS ask
stakeholders to take this issue into account
in commenting on methods to determine
the cost of applicable coverage for HRAs.
Treasury and IRS also invite comments on
each of the potential approaches described
above, in addition to suggestions for other
approaches that could be used in determining the cost of applicable coverage
under an HRA. Comments are invited also
on whether specific rules are needed for
HRAs with no carry-over feature and on
whether the potential approaches described in this section for purposes of determining the cost of applicable coverage
under § 4980I should apply for purposes
of determining the COBRA applicable
premium.
D. Determination Period
Section 4980B(f)(4)(C) provides that
the determination of any COBRA applicable premium is to be made in advance
for a 12-month period. Thus, for COBRA
continuation coverage the method for calculating the applicable premium must be
elected prior to the determination period
for which the applicable premium applies.
As applied for purposes of § 4980I, it is
contemplated that under similar rules the
method for calculating the cost of applicable coverage would be elected prior to
the determination period for which the
cost is determined. For example, a selfinsured plan using the calendar year as the
12-month determination period would

10
Section 4980I(d)(2)(A) provides that, for purposes of determining the cost of applicable coverage “any portion of the cost of such coverage which is attributable to the tax imposed under
this section shall not be taken into account[.]”

March 9, 2015

740

Bulletin No. 2015–10

elect the method (actuarial or past cost)
before the beginning of the calendar year.
If the plan elected the past cost method, it
would also have elected its measurement
period as well. Under these rules, the
amount of any liability under § 4980I
would generally be known at the beginning of the taxable year generating the
liability.
Treasury and IRS invite comments on
whether these COBRA rules should apply
for purposes of § 4980I and on whether
additional guidance would be beneficial
with respect to the determination period
for purposes of COBRA and for purposes
of § 4980I. In addition, Treasury and IRS
request comments on the feasibility of a
method for determining the cost of applicable coverage using actual costs: that is,
for a self-insured plan, basing the cost of
applicable coverage for a year on the actual costs paid by the plan to provide
health coverage for that year. This method
would not be available for determining
COBRA applicable premiums because
COBRA requires the applicable premium
to be determined prior to the period of
coverage. The feasibility of this method
may depend upon the timing for the filing
of a return and payment of the tax because
under this proposed approach the plan will
need to collect information after the end
of the plan year about claims incurred but
paid after the end of the calendar year.
Treasury and IRS anticipate addressing
these procedural timing issues and requesting comments on possible approaches as part of a subsequent notice
devoted largely to procedural issues under
§ 4980I.
V. APPLICABLE DOLLAR LIMIT
A. In General
Section 4980I(b)(3) provides two annual dollar limits — one for an employee
with self-only coverage and one for an
employee with other-than-self-only coverage. In general, the prorated annual
limitation that applies for any month is
determined based on whether self-only
or other-than-self-only coverage is provided to the employee by the employer
as of the beginning of the month. See
§ 4980I(b)(3)(B)(i).
Section 4980I(f)(1) provides that an
employee is treated as having self-only

Bulletin No. 2015–10

coverage with respect to any applicable
coverage of an employer, except that an
employee “shall be treated as having coverage other than self-only coverage only if
the employee is enrolled in coverage other
than self-only coverage in a group health
plan which provides minimum essential
coverage (as defined in section 5000A(f))
to the employee and at least one other
beneficiary, and the benefits provided under such minimum essential coverage do
not vary based on whether any individual
covered under such coverage is the employee or another beneficiary.”
Various types of applicable coverage
are not MEC. Examples include (to the
extent they are excepted benefits) the following: (1) health FSAs; (2) coverage for
on-site medical clinics; (3) coverage only
for a specified disease or illness, offered
as independent non-coordinated benefits
(if payment for coverage is excluded from
gross income or for which a deduction
under § 162(l) is allowed); and (4) hospital indemnity or other fixed indemnity insurance, offered as independent noncoordinated benefits (if payment for
coverage is excluded from gross income
or for which a deduction under § 162(l) is
allowed). See § 5000A(f)(3); Treas. Reg.
§ 1.5000A–2(g). HSAs are also applicable
coverage that do not constitute MEC. See
78 FR 54986, 54990 (Sept. 9, 2013).
B. Potential Approach for Application
of Dollar Limit to Employees with
both Self-Only and Other-Than-SelfOnly Applicable Coverage
An employee may simultaneously have
coverage to which the self-only dollar
limit applies and coverage to which the
other-than-self-only dollar limit applies.
For example, an employee may have selfonly major medical coverage and supplemental coverage (such as an HRA) that
covers the employee and the employee’s
family.
Treasury and IRS are considering an
approach to clarify the application of the
dollar limit when an employee simultaneously has one type of coverage that is
self-only coverage and another type of
coverage that is other-than-self-only coverage. Under this potential approach, the
applicable dollar limit for an employee
would depend on whether the employee’s
primary coverage/major medical coverage

741

is self-only coverage or other-than-selfonly coverage. For this purpose, an employee’s primary coverage/major medical
coverage would be the type of coverage
(self-only or other-than-self-only) that accounts for the majority of the aggregate
cost of applicable coverage. For example,
if an employee has applicable coverage
with an aggregate cost of $12,000, $3,000
of which is self-only coverage and $9,000
of which is other-than-self-only coverage,
the other-than-self-only coverage dollar
limit would apply to the full $12,000. If
self-only coverage and other-than-selfonly coverage make up equal amounts of
the aggregate cost of applicable coverage,
the other-than-self-only dollar limit would
apply to the employee.
Treasury and IRS are also considering
an alternative approach that would apply a
composite dollar limit determined by prorating the dollar limits for each employee
according to the ratio of the cost of the
self-only coverage and the cost of the
other-than-self-only coverage provided to
the employee. For example, if an employee has applicable coverage with an
aggregate cost of $12,000 of which
$3,000 is self-only major medical coverage and $9,000 is other-than-self-only
coverage, the composite dollar limit for
the employee to determine excess benefits
would be the sum of (1) 25% ($3,000/
($3,000 ⫹ $9,000)) of the self-only coverage dollar limit and (2) 75% ($9,000)/
($3,000 ⫹ $9,000) of the other-than-selfonly coverage dollar limit.
Other categorization rules under
§ 4980 I would continue to apply (so, for
example, self-only coverage under a multiemployer plan would be treated as otherthan-self-only coverage). Treasury and
IRS invite comments on these potential
approaches, including any potential administrative difficulties in applying them,
as well as any other approaches that might
address this issue.
C. Dollar Limit Adjustments
Section 4980I(b)(3) provides two baseline per-employee dollar limits for 2018
($10,200 for self-only coverage and
$27,500 for other-than-self-only coverage) but also provides that various adjustments, noted earlier in section II.A, will
apply to increase these amounts. Treasury
and IRS intend to include rules regarding

March 9, 2015

these adjustments in proposed regulations
and invite comments on the application
and adjustment of the dollar limits.
Specifically, as described earlier in section II.A, § 4980I(b)(3)(C)(ii) provides
that a “health cost adjustment percentage”
will be applied to the baseline peremployee dollar limits for 2018 to determine the actual applicable dollar limits for
that year, and § 4980I(b)(3)(C)(v) provides that, for taxable years after 2018, a
cost-of-living adjustment will be applied
to determine the applicable dollar limits.
1. Adjustments for Qualified Retirees
Section 4980I(b)(3)(C)(iv) provides
that an additional amount is added to the
dollar limits for an individual who is a
“qualified retiree.” For this purpose,
§ 4980I(f)(2) defines a “qualified retiree”
as “any individual who (A) is receiving
coverage by reason of being a retiree, (B)
has attained age 55, and (C) is not entitled
to benefits or eligible for enrollment under
the Medicare program under title XVIII of
the Social Security Act.” Treasury and
IRS request comments on how an employer determines that an employee is not
eligible for enrollment under the Medicare
program.
2. Adjustments for High-Risk
Professions
Section 4980I(b)(3)(C)(iv) provides
that an additional amount is added to the
dollar limits for an individual “who participates in a plan sponsored by an employer the majority of whose employees
covered by the plan are engaged in a
high-risk profession or employed to repair or install electrical or telecommunication lines.” Section 4980I(f)(3) provides that “employees engaged in a
high-risk profession” means “law enforcement officers (as such term is defined in section 1204 of the Omnibus
Crime Control and Safe Streets Act of
1968), employees in fire protection activities (as such term is defined in section 3(y) of the Fair Labor Standards
Act of 1938), individuals who provide
out-of-hospital emergency medical care
(including emergency medical technicians, paramedics, and first-responders),
individuals whose primary work is long-

March 9, 2015

shore work (as defined in section 258(b)
of the Immigration and Nationality Act
(8 U.S.C. 1288(b)), determined without
regard to paragraph (2) thereof), and
individuals engaged in the construction,
mining, agriculture (not including food
processing), forestry, and fishing industries. Such term includes an employee
who is retired from a high-risk profession described in the preceding sentence, if such employee satisfied the requirements of such sentence for a period
of not less than 20 years during the
employee’s employment.”
Treasury and IRS request comments on
how an employer determines whether the
majority of employees covered by a plan
are engaged in a high-risk profession and
what the term “plan” means in that context and how an employer determines that
an employee was engaged in a high-risk
profession for at least 20 years. Comments
are also requested on whether further
guidance on the definition of “employees
engaged in a high risk profession” would
be beneficial, taking into consideration
that various categories set forth in
§ 4980I(f)(3) are determined by laws not
under the jurisdiction of Treasury or IRS.

similarly situated employees of the employer. Some stakeholders have suggested
that the cost of applicable coverage for an
employee could be determined by reference to the cost of similar coverage available elsewhere (for example, through an
Affordable Insurance Exchange, also
known as a Health Insurance Marketplace). Some have also raised the question
whether the cost of applicable coverage
for an employee could be determined by
reference to coverage available elsewhere
based on actuarial values, metal levels
(bronze, silver, etc.), or other metrics.
However, such metrics might be based
only on essential health benefits (defined
in 45 CFR § 156.110) and may not fully
account for other features and benefits. In
addition, in the case of self-insured or
large group plans, two such plans that
have different costs of applicable coverage might nonetheless have equal actuarial values. Treasury and IRS invite comments on whether any alternative
approaches to determining the cost of applicable coverage would be consistent
with the statutory requirements of § 4980I
and, if so, would be useful.

3. Age and Gender Adjustments

Treasury and IRS invite comments on
the issues addressed in this notice and on
any other issues under § 4980I. As noted
earlier, Treasury and IRS intend to issue
another notice inviting comments on certain additional issues not addressed in this
notice. It is expected that the comments
responding to the notices will be used to
inform proposed regulations that will be
issued in the future for further public notice and comment.
Public comments should be submitted no later than May 15, 2015. Comments should include a reference to Notice 2015–16. Send submissions to CC:
PA:LPD:PR (Notice 2015–16), Room
5203, Internal Revenue Service, P.O.
Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be
hand delivered Monday through Friday
between the hours of 8 a.m. and 4 p.m.
to CC:PA:LPD:PR (Notice 2015–16),
Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW,
Washington, DC 20044, or sent electronically, via the following e-mail address:
[email protected].

Section 4980I(b)(3)(C)(iii) provides
that the amounts of the dollar limits for an
employer may be increased by an age and
gender adjustment if the age and gender
characteristics of an employer’s workforce are different from those of the national workforce. Comments are requested on whether it would be desirable
and possible to develop safe harbors that
appropriately adjust dollar limit thresholds for employee populations with age
and gender characteristics that are different from those of the national workforce.
VI. POSSIBILITY OF OTHER
METHODS OF DETERMINING
COST OF APPLICABLE
COVERAGE
As noted previously, § 4980I provides
that the cost of applicable coverage is
determined under rules that are similar to
the rules for determining the COBRA applicable premium, which is based on the
cost of applicable coverage provided to

742

VII. REQUEST FOR COMMENTS

Bulletin No. 2015–10

Please include “Notice 2015–16” in the
subject line of any electronic communication. All material submitted will be available for public inspection and copying.

Chief Counsel (Tax Exempt and Government Entities). For further information regarding this notice contact Ms. Levin at
(202) 317-5500 (not toll-free numbers).

VIII. RELIANCE
This notice does not provide guidance
under § 4980I upon which taxpayers may
rely.
IX. NO INFERENCE
No inference should be drawn from
any provision of this notice concerning
any provision of § 4980I other than those
addressed in this notice or concerning any
other section of the Affordable Care Act
or COBRA.
X. DRAFTING INFORMATION
The principal author of this notice is
Karen Levin of the Office of Associate

Section 1274.—
Determination of Issue
Price in the Case of
Certain Debt Instruments
Issued for Property
(Also Sections 42, 280G, 382, 412, 467, 468, 482,
483, 642, 807, 846, 1288, 7520, 7872).

Rev. Rul. 2015– 4
This revenue ruling provides various
prescribed rates for federal income tax
purposes for March 2015 (the current
month). Table 1 contains the short-term,
mid-term, and long-term applicable federal rates (AFR) for the current month for

purposes of section 1274(d) of the Internal
Revenue Code. Table 2 contains the shortterm, mid-term, and long-term adjusted
applicable federal rates (adjusted AFR)
for the current month for purposes of section 1288(b). Table 3 sets forth the adjusted federal long-term rate and the longterm tax-exempt rate described in section
382(f). Table 4 contains the appropriate
percentages for determining the lowincome housing credit described in section 42(b)(1) for buildings placed in service during the current month. However,
under section 42(b)(2), the applicable percentage for non-federally subsidized new
buildings placed in service after July 30,
2008, with respect to housing credit dollar
amount allocations made before January
1, 2015 shall not be less than 9%.
Finally, Table 5 contains the federal
rate for determining the present value of
an annuity, an interest for life or for a term
of years, or a remainder or a reversionary
interest for purposes of section 7520.

REV. RUL. 2015–4 TABLE 1
Applicable Federal Rates (AFR) for March 2015
Annual
AFR
110% AFR
120% AFR
130% AFR
AFR
110%
120%
130%
150%
175%

.40%
.44%
.48%
.52%

AFR
AFR
AFR
AFR
AFR

1.47%
1.62%
1.76%
1.91%
2.20%
2.58%

AFR
110% AFR
120% AFR
130% AFR

2.19%
2.41%
2.64%
2.85%

Bulletin No. 2015–10

Period for Compounding
Semiannual
Short-term
.40%
.44%
.48%
.52%
Mid-term
1.46%
1.61%
1.75%
1.90%
2.19%
2.56%
Long-term
2.18%
2.40%
2.62%
2.83%

743

Quarterly

Monthly

.40%
.44%
.48%
.52%

.40%
.44%
.48%
.52%

1.46%
1.61%
1.75%
1.90%
2.18%
2.55%

1.46%
1.60%
1.74%
1.89%
2.18%
2.55%

2.17%
2.39%
2.61%
2.82%

2.17%
2.39%
2.61%
2.81%

March 9, 2015

REV. RUL. 2015–4 TABLE 2
Adjusted AFR for March 2015

Short-term adjusted AFR
Mid-term adjusted AFR
Long-term adjusted AFR

Annual
.36%
1.14%
2.19%

Period for Compounding
Semiannual
.36%
1.14%
2.18%

Quarterly
.36%
1.14%
2.17%

REV. RUL. 2015–4 TABLE 3
Rates Under Section 382 for March 2015
Adjusted federal long-term rate for the current month
Long-term tax-exempt rate for ownership changes during the current month (the highest of the adjusted
federal long-term rates for the current month and the prior two months.)

Monthly
.36%
1.14%
2.17%

2.19%
2.67%

REV. RUL. 2015–4 TABLE 4
Appropriate Percentages Under Section 42(b)(1) for March 2015
Note: Under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after
July 30, 2008, with respect to housing credit dollar amount allocations made before January 1, 2015, shall not be less
than 9%.
Appropriate percentage for the 70% present value low–income housing credit
7.42%
Appropriate percentage for the 30% present value low–income housing credit
3.18%

REV. RUL. 2015–4 TABLE 5
Rate Under Section 7520 for March 2015
Applicable federal rate for determining the present value of an annuity, an interest for life or
a term of years, or a remainder or reversionary interest

March 9, 2015

744

1.8%

Bulletin No. 2015–10

Part IV. Items of General Interest
Request for Information
REG–102648 –15
Request for Information on
Suspensions of Benefits
under the Multiemployer
Pension Reform Act of 2014
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Request for information.
SUMMARY: The Department of the
Treasury invites public comments with regard to future guidance required to implement provisions of the Multiemployer
Pension Reform Act of 2014, Division O
of the Consolidated and Further Continuing Appropriations Act, 2015, Public Law
No. 113–235 (MPRA). MPRA generally
permits a sponsor of a multiemployer defined benefit plan that is in critical and
declining status to suspend certain benefits following the provision of specified
notice, consideration of public comments,
approval of an application for suspension,
and satisfaction of other specified conditions (including a participant vote).
DATES: Comments must be received by
April 6, 2015.
ADDRESSES: Send submissions to: CC:
PA:LPD:PR (REG–102648 –15), room
5205, Internal Revenue Service, PO Box
7604, Ben Franklin Station, Washington
D.C. 20044. Submissions may be handdelivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to:
CC:PA:LPD:PR
(REG–102648 –15),
Courier’s Desk, Internal Revenue Service,
1111 Constitution Avenue, N.W., Washington, D.C., or sent electronically via the
Federal eRulemaking Portal at http://www.
regulations.gov (IRS REG–102648 –15).
All materials submitted will be shared with
the Department of Labor and the Pension
Benefit Guaranty Corporation, and will be
available for public inspection and copying.

FOR FURTHER INFORMATION
CONTACT: Concerning the request for
information, Jamie Dvoretzky at (202)
317-4102; concerning submission of comments, Regina Johnson at (202) 317-6901
(not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
Section 212 of the Pension Protection
Act of 2006, Public Law No. 109 –280
(120 Stat. 780 (2006)) (PPA ’06) added
section 432 of the Internal Revenue Code
(Code), which prescribes funding rules for
certain multiemployer defined benefit
plans in endangered and critical status and
permits plans in critical status to be
amended to reduce certain otherwise protected benefits (referred to as “adjustable
benefits”). Section 202 of PPA ’06
amended section 305 of the Employee Retirement Income Security Act of 1974,
Public Law No. 93– 406 (88 Stat. 829
(1974)), as amended (ERISA), to prescribe parallel rules. PPA ’06 provided
that section 432 and ERISA section 305
would sunset for plan years beginning after December 31, 2014. However, section
101 of MPRA made them permanent, with
certain modifications.
Section 201 of MPRA amended Code
section 432 to add a new status, called
“critical and declining status,” for multiemployer defined benefit plans. Section
432(b)(6) provides that a plan in critical
status is treated as being in critical and
declining status if the plan satisfies the
criteria for critical status, and in addition
is projected to become insolvent within
the meaning of section 418E during the
current plan year or any of the 14 succeeding plan years (or 19 succeeding plan
years if the plan has a ratio of inactive
participants to active participants that exceeds two to one or if the funded percentage of the plan is less than 80 percent).11
Section 201 of MPRA also amended
section 432(e)(9) to prescribe benefit suspension rules for multiemployer defined
benefit plans in critical and declining status. Section 432(e)(9)(A) provides that

notwithstanding section 411(d)(6) and
subject to the requirements of section
432(e)(9)(B) through (I), the plan sponsor
of a plan in critical and declining status
may, by plan amendment, suspend benefits that the sponsor deems appropriate.
Section 432(e)(9)(B) defines “suspension
of benefits” as the temporary or permanent reduction of any current or future
payment obligation of the plan to any participant or beneficiary under the plan,
whether or not in pay status at the time of
the suspension of benefits, and sets forth
other rules relating to suspensions. In the
case of plans with 10,000 or more participants, section 432(e)(9)(B) requires the
plan sponsor to select a plan participant in
pay status (who may also be a plan
trustee) to act as a retiree representative
throughout the suspension approval process.
Section 432(e)(9)(C) prescribes the
conditions that must be satisfied before a
plan sponsor may suspend benefits. For
example, section 432(e)(9)(C)(i) provides
that the plan actuary must certify, taking
into account the proposed suspensions of
benefits (and, if applicable, a proposed
partition of the plan under section 4233 of
ERISA), that the plan is projected to avoid
insolvency within the meaning of section
418E, assuming the suspensions of benefits continue until the suspensions of benefits expire by their own terms or, if no
such expiration is set, indefinitely. Section
432(e)(9)(D) contains limitations on the
benefits that may be suspended. For example, section 432(e)(9)(D)(ii) limits the
applicability of a suspension in the case of a
participant or beneficiary who has attained
age 75 as of the effective date of the suspension and section 432(e)(9)(D)(iii) provides that no benefits based on disability (as
defined under the plan) may be suspended.
Section 432(e)(9)(E) prescribes rules
relating to possible benefit improvements
while a suspension of benefits is in effect.
Section 432(e)(9)(F) contains notice requirements associated with a suspension
of benefits. These include the requirement
under section 432(e)(9)(F)(i) that no suspension of benefits may be made unless

11
Section 201(a) of MPRA makes parallel amendments to section 305 of ERISA. Under section 101 of Reorganization Plan No. 4 of 1978 (43 FR 47713), the Department of the Treasury
has interpretive jurisdiction over the subject matter of this document for purposes of ERISA as well as the Code.

Bulletin No. 2015–10

745

March 9, 2015

notice to specified parties of the proposed
suspension has been given by the plan
sponsor (in the form and manner to be
prescribed in guidance) concurrently with
an application for approval of the suspension. Section 432(e)(9)(G) describes the
process for approval or rejection of a plan
sponsor’s application for a suspension of
benefits, including that the Treasury Secretary, in consultation with the Pension
Benefit Guaranty Corporation (PBGC)
and the Secretary of Labor, shall approve
an application upon finding that the plan is
eligible for the suspension and has satisfied the criteria of section 432(e)(9)(C),
(D), (E), and (F). As part of this process,
section 432(e)(9)(G)(ii) requires the publication of a request for comments within
30 days after receipt of an application for
suspension of benefits, and section
432(e)(9)(G)(iii), (iv) and (v) prescribes
rules for agency action and review of the
application.
Section 432(e)(9)(H) contains rules relating to the participant vote that is required before any suspension of benefits
may take effect, with special rules for
systemically important plans. The special
rules include an opportunity for the Participant and Plan Sponsor Advocate selected under section 4004 of ERISA to
submit recommendations with respect to a
suspension in certain circumstances. Section 432(e)(9)(I) contains provisions relating to judicial review.
An application for approval of a plan
amendment to suspend benefits may be
made in combination with an application
to the PBGC for a partition of the plan,
and a plan sponsor also may ask the
PBGC for technical or financial assistance
with a merger. The PBGC is issuing its
own request for information to seek comment on the processes associated with applying for partition or merger assistance,
including how such processes should be
coordinated with the benefit suspension
process. The agencies will coordinate on
the development of processes that will
apply to applications falling within their
respective jurisdictions.
Request for Information
Comments are requested on matters
that may be addressed in future guidance
implementing section 432(e)(9), and in
particular on the following:

March 9, 2015

1. How should future guidance address
actuarial and other issues, including
duration, related to the following certifications and determinations:
a. The actuary’s certification under
section 432(b)(3) that a multiemployer plan is in critical and declining status;
b. The actuary’s section 432(e)(9)
(C)(i) projection of continued
solvency (taking into account the
proposed suspension and, if applicable, a proposed partition under section 4233 of ERISA); and
c. The plan sponsor’s section
432(e)(9)(C)(ii)
determination
that the plan is projected to become insolvent unless benefits
are suspended?
2. For purposes of the section
432(e)(9)(D)(iii) limitation that a
suspension is not permitted to apply
to benefits based on disability (as
defined under the plan), how can a
plan sponsor identify which benefits
are based on disability?
3. For participants who have not yet
retired:
a. What practical issues should be
considered as a result of the fact
that their benefits are not yet
fixed (for example, their benefits
could vary as a result of future
accruals, when they decide to retire and which optional form of
benefit they select)?
b. What practical issues should be
considered in the case of a suspension of benefits that is combined with a reduction of future
accruals or a reduction of section
432(e)(8) adjustable benefits
(such as subsidized early retirement factors) under a rehabilitation plan?
4. For participants who have retired,
what practical issues should be considered regarding the section
432(e)(9)(D)(ii) age limitations on
suspensions, the application of the
section 432(e)(9)(E) rules on benefit
improvements, or other provisions?
5. With respect to the section
432(e)(9)(F) requirement to provide
notice of the proposed suspension to
plan participants and beneficiaries

746

concurrently with the submission of
the application for approval:
a. What suggestions do commenters
have for the steps that are needed
to satisfy the requirement to provide notice to the plan participants and beneficiaries “who may
be contacted by reasonable efforts,” including the application
of that requirement to terminated
vested participants?
b. What practical issues do plan
sponsors anticipate in providing
individual estimates of the effect
of the proposed suspensions on
each participant and beneficiary?
c. If the suspension is combined
with other reductions as described in request number 3.b,
how will the notice of proposed
suspension interact with the notices required for those other reductions?
d. What issues arise in coordinating
benefit protections that are measured as of the date of suspension
(such as the restriction on suspensions that apply to a participant or beneficiary who has attained age 75 as of the effective
date of the suspension) with the
timing of the application, notice,
and voting process?
6. With respect to item 5, please provide any examples of notices of proposed suspension that commenters
would like to be considered in the
development of a model notice.
7. What issues arise in connection
with the section 432(e)(9)(G)(ii) requirement to solicit comments on an
application for suspension of benefits?
a. Should the comments received
from contributing employers,
employee organizations, participants and beneficiaries, and other
interested parties be made available to the public?
b. How long should the comment
period last?
8. With respect to the section
432(e)(9)(H) participant vote, what
issues arise in connection with:
a. Preparing the ballot, including
developing a statement in opposition to the suspension compiled

Bulletin No. 2015–10

from comments and obtaining
approval of the ballot within the
statutory time constraints for
conducting a vote; and
b. Conducting the vote and obtaining certification of the results of
the vote?
9. What other practical issues do commenters anticipate will arise in the
course of implementing these provisions?
Timing of Applications and Notices
Section 201(b)(7) of MPRA provides
that, not later than 180 days after the date
of the enactment of this Act, the Treasury
Secretary, in consultation with the Pen-

Bulletin No. 2015–10

sion Benefit Guaranty Corporation and the
Secretary of Labor, shall publish appropriate guidance to implement section
432(e)(9).
In
addition,
section
432(e)(9)(F)(i) provides that no suspension of benefits may be made unless notice of the proposed suspension has been
given by the plan sponsor concurrently
with an application for approval of the
suspension,
and
section
432(e)(9)(F)(iii)(I) provides that notice
must be “provided in a form and manner
prescribed
in
guidance.”
Section
432(e)(9)(G)(i) provides that the Treasury
Secretary, in consultation with the Pension Benefit Guaranty Corporation and the
Secretary of Labor, shall approve an application for suspension upon finding that

747

the plan has satisfied the criteria of section
432(e)(9)(C), (D), (E), and (F). Because
appropriate guidance is required to implement section 432(e)(9), including the procedures for the plan sponsor to submit an
application for approval of a suspension
of benefits and provide concurrent notice,
a plan sponsor should not submit an application for a suspension of benefits until
a date specified in that future guidance.
Dated: February 11, 2015.
_____________________________
David G. Clunie,
Executive Secretary,
Department of the Treasury.

March 9, 2015

Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplified describes a situation where
no change is being made in a prior published position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle applied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarified is used in those instances
where the language in a prior ruling is
being made clear because the language
has caused, or may cause, some confusion. It is not used where a position in a
prior ruling is being changed.
Distinguished describes a situation
where a ruling mentions a previously published ruling and points out an essential
difference between them.
Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A

and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).
Obsoleted describes a previously published ruling that is not considered determinative with respect to future transactions. This term is most commonly used in
a ruling that lists previously published rulings that are obsoleted because of changes
in laws or regulations. A ruling may also
be obsoleted because the substance has
been included in regulations subsequently
adopted.
Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a period of time in separate rulings. If the new
ruling does more than restate the sub-

stance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previously
published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rulings in the series.
Suspended is used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of
cases in litigation, or the outcome of a
Service study.

Abbreviations
The following abbreviations in current
use and formerly used will appear in material published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.

Bulletin No. 2015–10

ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.

i

PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.

March 9, 2015

Numerical Finding List1

Revenue Rulings:

Bulletin 2015–1 through 2015–10

2015-1,
2015-2,
2015-3,
2015-4,

Announcements:
2015-2,
2015-3,
2015-4,
2015-5,
2015-6,
2015-8,

2015-3
2015-3
2015-5
2015-7
2015-8
2015-9

I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.
I.R.B.

324
328
565
602
685
698

2015-4 I.R.B. 331
2015-3 I.R.B. 321
2015-6 I.R.B. 580
2015-10 I.R.B. 743

Treasury Decisions:
9707,
9708,
9709,
9710,

2015-2
2015-5
2015-7
2015-8

I.R.B.
I.R.B.
I.R.B.
I.R.B.

247
337
593
603

Proposed Regulations:
REG-109187-11, 2015-2 I.R.B. 277
REG-132751-14, 2015-2 I.R.B. 279
REG-145878-14, 2015-2 I.R.B. 290
REG-153656-3, 2015-5 I.R.B. 566
REG-102648-15, 2015-10 I.R.B. 745

Notices:
2015-1, 2015-2 I.R.B. 249
2015-2, 2015-4 I.R.B. 334
2015-3, 2015-6 I.R.B. 583
2015-4, 2015-5 I.R.B. 407
2015-5, 2015-5 I.R.B. 408
2015-6, 2015-5 I.R.B. 412
2015-7, 2015-6 I.R.B. 585
2015-8, 2015-6 I.R.B. 589
2015-9, 2015-6 I.R.B. 590
2015-11, 2015-8 I.R.B. 618
2015-15, 2015-9 I.R.B. 687
2015-12, 2015-10 I.R.B. 700
2015-13, 2015-10 I.R.B. 722
2015-14, 2015-10 I.R.B. 722
2015-16, 2015-10 I.R.B. 732
2015-19, 2015-9 I.R.B. 690

Revenue Procedures:
2015-1, 2015-1 I.R.B. 1
2015-2, 2015-1 I.R.B. 105
2015-3, 2015-1 I.R.B. 129
2015-4, 2015-1 I.R.B. 144
2015-5, 2015-1 I.R.B. 186
2015-6, 2015-1 I.R.B. 194
2015-7, 2015-1 I.R.B. 231
2015-8, 2015-1 I.R.B. 235
2015-9, 2015-2 I.R.B. 249
2015-10, 2015-2 I.R.B. 261
2015-12, 2015-2 I.R.B. 265
2015-13, 2015-5 I.R.B. 419
2015-14, 2015-5 I.R.B. 450
2015-15, 2015-5 I.R.B. 564
2015-16, 2015-7 I.R.B. 596
2015-17, 2015-7 I.R.B. 599
2015-18, 2015-8 I.R.B. 642
2015-19, 2015-8 I.R.B. 678
2015-20, 2015-9 I.R.B. 694

1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2014 –27 through 2014 –52 is in Internal Revenue Bulletin
2014 –52, dated December 28, 2014.

March 9, 2015

ii

Bulletin No. 2015–10

Finding List of Current Actions on
Previously Published Items1
Bulletin 2015–1 through 2015–10

Announcements:
2010-3
Amplified by
Ann. 2015-3, 2015-3 I.R.B. 328

Revenue Procedures—Continued:
2011-14
Amplified by
Rev. Proc. 2015-13, 2015-5 I.R.B. 419
2011-14
Clarified by
Rev. Proc. 2015-13, 2015-5 I.R.B. 419

Revenue Procedures:

1997-27
Clarified by
Rev. Proc. 2015-13, 2015-5 I.R.B. 419

2014-01
Superseded by
Rev. Proc. 2015-01, 2015-01 I.R.B. 1

1997-27
Modified by
Rev. Proc. 2015-13, 2015-5 I.R.B. 419

2014-02
Superseded by
Rev. Proc. 2015-02, 2015-01 I.R.B. 105

2012-11
Superseded by
Rev. Proc. 2015-17, 2015-7 I.R.B. 599

2014-03
Superseded by
Rev. Proc. 2015-03, 2015-01 I.R.B. 129

2015-9
Modified by
Rev. Proc. 2015-17, 2015-7 I.R.B. 599

2014-04
Superseded by
Rev. Proc. 2015-04, 2015-01 I.R.B. 144

2015-14
Modified by
Rev. Proc. 2015-20, 2015-9 I.R.B. 694

2014-05
Superseded by
Rev. Proc. 2015-05, 2015-01 I.R.B. 186

Revenue Rulings:
92-19
Supplemented by
Rev. Rul. 2015-02, 2015-3 I.R.B. 321

2014-06
Superseded by
Rev. Proc. 2015-06, 2015-01 I.R.B. 194
2014-07
Superseded by
Rev. Proc. 2015-07, 2015-01 I.R.B. 231
2014-08
Superseded by
Rev. Proc. 2015-08, 2015-01 I.R.B. 235
2014-10
Superseded by
Rev. Proc. 2015-10, 2015-2 I.R.B. 261
2003-63
Superseded by
Rev. Proc. 2015-12, 2015-2 I.R.B. 265
2011-14
Modified by
Rev. Proc. 2015-12, 2015-2 I.R.B. 265
2011-14
Modified by
Rev. Proc. 2015-13, 2015-5 I.R.B. 419

1
A cumulative list of current actions on previously published items in Internal Revenue Bulletins 2014 –27 through 2014 –52 is in Internal Revenue Bulletin 2014 –52, dated December 28,
2014.

Bulletin No. 2015–10

iii

March 9, 2015

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